Employee Research

EMPLOYEERESEARCH

HOW TO INCREASE EMPLOYEE

INVOLVEMENT THROUGH

CONSULTATION

EMPLOYEERESEARCH

PETER GOUDGE

London and Philadelphia

MARKET RESEARCH IN PRACTICE

The MarketResearch Society

With over 8,000 members in more than 50 countries, The Market ResearchSociety (MRS) is the world’s largest international membership organiza-tion for professional researchers and other engaged in (or interested in)marketing, social or opinion research.

It has a diverse membership of individual researchers within agencies,independent consultancies, client-side organizations, and the academiccommunity, and from all levels of seniority and job functions.

All MRS members agree to comply with the MRS Code of Conduct (seeAppendix 2), which is supported by the Codeline advisory service and arange of specialist guidelines on best practice.

MRS offers various qualifications and membership grades, as well astraining and professional development resources to support these. It isthe official awarding body in the UK for vocational qualifications in mar-ket research.

MRS is a major supplier of publications and information services,conferences and seminars and many other meeting and networkingopportunities for researchers.

MRS is ‘the voice of the profession’ in its media relations and publicaffairs activities on behalf of professional research practitioners, and aimsto achieve the most favourable climate of opinions and legislativeenvironment for research.

The Market Research Society15 Northburgh Street, London EC1V 0JR

Fax: 44 20 7490 0608e-mail: [email protected]: www.mrs.org.uk

Telephone: 44 20 7490 4911

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mailto:[email protected]

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MARKET RESEARCH IN PRACTICE SERIES

Published in association with The Market Research SocietyConsultant Editors: David Barr and Robin J Birn

Kogan Page has joined forces with The Market Research Society (MRS)to publish this unique series of books designed to cover the latest devel-opments in market research thinking and practice.

The series provides up-to-date knowledge on the techniques of marketresearch and customer insight and best practice in implementing them.It also shows the contribution market research and customer informationmanagement techniques can make to helping organizations of all kindsin shaping their strategy, structure, customer focus and value creation.

The series consists of several essential guides that focus on the core skillsdeveloped in the MRS training and qualifications programmes(www.mrs.org.uk). It provides practical advice and case studies on howto plan, use, act on and follow-up research, and on how to combine it withother sources of information to develop deep insights into customers.

Fully international in scope of content, its readership is also from all overthe world. The series is designed not only for specialist marketresearchers, but also for all those involved in developing and using

including planning, communications, brand management, and interac-tive marketers.

Other titles in the series:Business to Business Market Research, Ruth McNeilConsumer Insight, Merlin StoneThe Effective Use of Market Research, Robin J BirnMarket Intelligence: How and why organizations use market research,

Martin CallinghamMarket Research in Practice: A guide to the basics, Paul Hague, Nick Hague

& Carol-Ann MorganQuestionnaire Design, Ian Brace

Kogan Page Ltd120 Pentonville RoadLondon N1 9JNTel: 020 7278 0433www.kogan-page.co.uk

deeper insights into their customers – marketers in all disciplines,

Researching Customer Satisfaction and Loyalty, Paul Szwarc

0-7494-4540-8_FM_ii

www.mrs.org.uk

www.kogan-page.co.uk

HOW TO INCREASE EMPLOYEEINVOLVEMENT THROUGH

CONSULTATION

EMPLOYEERESEARCH

PETER GOUDGE

London and Philadelphia

MARKET RESEARCH IN PRACTICE

0-7494-4540-8_FM_iii

Publisher’s noteEvery possible effort has been made to ensure that the information contained inthis book is accurate at the time of going to press, and the publishers and authorscannot accept responsibility for any errors or omissions, however caused. Noresponsibility for loss or damage occasioned to any person acting, or refrainingfrom action, as a result of the material in this publication can be accepted by theeditor, the publisher or any of the authors.

First published in Great Britain and the United States in 2006 by Kogan PageLimited

Apart from any fair dealing for the purposes of research or private study, orcriticism or review, as permitted under the Copyright, Designs and Patents Act1988, this publication may only be reproduced, stored or transmitted, in any formor by any means, with the prior permission in writing of the publishers, or in thecase of reprographic reproduction in accordance with the terms and licencesissued by the CLA. Enquiries concerning reproduction outside these terms shouldbe sent to the publishers at the undermentioned addresses:

120 Pentonville RoadLondon N1 9JNUnited Kingdomwww.kogan-page.co.uk

© Peter Goudge, 2006

The right of Peter Goudge to be identified as the author of this work has beenasserted by him in accordance with the Copyright, Designs and Patents Act 1988.

ISBN 0 7494 4540 8

British Library Cataloging-in-Publication Data

A CIP record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Goudge, Peter.Employee research : how to increase employee involvement through

consultation / Peter Goudge.p. cm.

Includes bibliographical references and index.ISBN 0-7494-4540-8

1. Employee attitude surveys. 2. Employees—Attitudes—Research. 3. Jobsatisfaction—Research. 4. Organizational commitment—Research. 5. Personnelmanagement—Research. I. Title.HF5549.5.A83G68 2006658.3’145—dc22

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Printed and bound in the United States by Thomson-Shore, Inc

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Contents

The editorial boardForewordAcknowledgements

Introduction

1. Conducting employee research: reasons and benefitsIntroduction 5; State of the nation 6; Prioritizing managementaction 7; Managing response to change 8; Culture mapping 10;Work/life balance, harassment and stress 11;Benchmarking 13; Key performance indicators 14; Balancingtop-down communications 15; Widening the ideas pool 16;Internal communications audits 17; Externalcommunications 17; Successful recruitment and retention 18;Customer and business alignment 18; Business models andquality systems 19; Conclusions 23

2. Employees and customer satisfactionIntroduction 25; Unhappy employees and unhappycustomers 26; Unhappy employees and happy customers 28;Happy employees and unhappy customers 31; Happyemployees and happy customers 31; Loyalty andcommitment 33; Employee engagement 34; Employee–customer profit chain 36; Customer relationships 39;Employees as ‘real’ customers 40; Internal ‘quasi’customers 41; Organizational citizenship behaviour 42;Employees in the wider world 43; Conclusions 44

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3. Employees, shareholders and capitalIntroduction 45; Happy employees and happyshareholders 46; Complete convergence 47; Works councils 50;Encouraging employees to become shareholders 51; Otherstakeholders 54; Intellectual capital 57; Human capital 59;Conclusions 62

4. Employee research and the communications contextIntroduction 63; Representatives 64; Directcommunications 67; Knowledge management 74; Thecommunications mix 75; Indirect communications 77;Employee research 80; Conclusions 80

5. Good practice in setting up a surveyIntroduction 81; Prerequisites 81; Writing a research brief 82;Research objectives 83; The advantages of using an externalsupplier 84; Next steps in conducting a quantitative study 86;Quantitative studies generally 101; Conclusions 102

6. Internet and e-mail surveysIntroduction 103; What constitutes internet research 104; E-mail, an intranet or the internet? 105; Advantages of web-based surveys 107; Issues for consideration 112; MRS internetresearch guidelines 115; Conclusions 117

7. Qualitative researchIntroduction 119; Specific features of qualitative research 119;The skills required of a qualitative researcher 122; Issuesspecific to qualitative research amongst employees 124;Applications of qualitative research 128; Qualitative researchonline 136; Conclusions 136

8. The advent of employee insightIntroduction 139; The evolution of a discipline – MR 140;Customer insight 140; The evolution of a discipline – HR 141;Business goals 142; The psychological contract 143; Theemployer brand 144; Employee insight 144; How this insighthappens 145; Conclusions 152

Appendix 1: Information and Consultation RegulationsAppendix 2: The Market Research Society Code of ConductAppendix 3: Conducting research with employeesReferencesIndex

45

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103

119

139

155169191199205

Contents

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The editorial board

SERIES EDITORSDavid Barr has been Director General of The Market Research Societysince July 1997. He previously spent over 25 years in business informationservices and publishing. He has held management positions with XeroxPublishing Group, the British Tourist Authority and Reed Internationalplc. His experience of market research is therefore all on the client side,having commissioned many projects for NPD and M&A purposes. Agraduate of Glasgow and Sheffield Universities, David Barr is a Fellowof the Chartered Management Institute and a Fellow of The Royal Societyof Arts.

Robin J Birn has been marketing and market research practitioner forover 25 years. In 1985 Robin set up Strategy, Research and Action Ltd, amarket research company for the map, atlas and travel guide sector, andthe book industry. In 2004 he was appointed Head of Consultation andResearch at the Institute of Chartered Accountants of England and Wales.He is a Fellow of The Market Research Society and a Fellow of the Char-tered Institute of Marketing, and is also the editor of The InternationalHandbook of Market Research Techniques.

ADVISORY MEMBERSMartin Callingham was formerly Group Market Research Director atWhitbread, where he ran the Market Research department for 20 yearsand was a non-executive director of the company’s German restaurant

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chain for more than 10 years. Martin has also played his part in the marketresearch world. Apart from being on many committees of the MRS, ofwhich he is a Fellow, he was Chairman of the Association of Users ofResearch Agencies (AURA), has been a council member of ESOMAR, andhas presented widely, winning the David Winter Award in 2001 at theMRS Conference.

Nigel Culkin is a Fellow of The Market Research Society and member ofits Professional Development Advisory Board. He has been a full membersince 1982. He has been in academia since 1991 and is currently DeputyDirector, Commercial Development at the University of Hertfordshire,where he is responsible for activities that develop a culture of en-trepreneurism and innovation among staff and students. He is Chair ofthe University’s, Film Industry Research Group (FiRG), supervisor to anumber of research students and regular contributor to the media on thecreative industries.

Professor Merlin Stone is one of the UK’s most experienced consultants,lecturers and trainers in CRM, database marketing and customer service.

selection company specializing in CRM. Merlin is a visiting Professor atBristol Business School. He has written many articles and 25 books onmarketing and customer service, including Up Close and Personal: CRM @Work, Customer Relationship Marketing, Successful Customer RelationshipMarketing, CRM in Financial Services and The Customer Management Score-card, all published by Kogan Page, and The Definitive Guide to Direct andInteractive Marketing, published by Financial Times-Pitman. He is aFounder Fellow of the Institute of Direct Marketing and a Fellow of theChartered Institute of Marketing.

Paul Szwarc began his career as a market researcher at the Co-operativeWholesale Society (CWS) Ltd in Manchester in 1975. Since then he hasworked at Burke Market Research (Canada), American Express Europe,IPSOS RSL, International Masters Publishers Ltd and PSI Global prior tojoining the Network Research board as a director in October 2000. Overthe past few years Paul has specialized on the consumer financial sector,directing multi-country projects on customer loyalty and retention, newproduct/service development, and employee satisfaction in the UK,European and North American markets. Paul is a full member of TheMarket Research Society. He has presented papers at a number of MRSand ESOMAR seminars and training courses.

The Editorial Board

viii

He is a Director of WCL, specialists in change management in the publicand private sectors and of Nowellstone Ltd, a recruitment, search and

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Foreword

So everyone will welcome the tremendous experience and insightPeter Goudge brings to the subject of employee research. The book pro-vides an extremely cogent and intelligent account of the issues that needto be taken into account in making sure that one’s employee research issufficiently robust to provide a professional platform for sound organi-zational decision making.

I have no hesitation in commending this book to fellow market re-search professionals and others who regularly carry out employee re-search and want an update on latest techniques and developments. Inaddition, the book will be of great value to those undertaking employeeresearch for the first time, including those studying for Market ResearchSociety educational qualifications. In short, this book is an informativeand invaluable read on a critically important subject.

Dr D V L SmithChairman, Incepta Marketing Intelligence

Professor, University of Hertfordshire Business SchoolFormer Chairman of the Market Research Society

In business the critical importance of understanding, not only one’scustomers, but also one’s own employees has finally been firmlyacknowledged. Employees can be powerful ambassadors in communi-cating a company’s values throughout the marketplace. Moreover com-panies want to be good corporate citizens, much of which includesensuring they rigorously examine the employee perspective on differentorganizational issues and developments. Against this backdrop there wasan urgent need for comprehensive authoritative, clearly written text thatoutlines the key principles behind undertaking professional researchamongst employees.

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Acknowledgements

In the course of my career I have been fortunate to work with a hugenumber of people who have added to my personal development andmade the time I spent as client, colleague and supplier enjoyable and re-warding. Many of these people have contributed to this book indirectlythrough all that I have learnt from them.

More specifically, for their direct contributions to the book, I wouldlike to take the opportunity to thank Alex Wilke of Infocorp, Barry Fitz-patrick of Total, Charles Fair of Right Management Consultants, KateWillis of Kate Willis Research, Lucinda Craig of Elucidation, Ray Ecclesof BDI Surveys and Sam Sparrow of Cadbury Schweppes. Special thanksare due to Marilyn, for giving me the space to write the book, and toBryony Pearce whose experience and attention to detail have been in-valuable as she sought to make sense of my initial drafts.

Peter Goudge

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Introduction

The sustained success of any organization is most likely to be achievedwhere an appropriate balance is struck between the interests of variousstakeholding groups, including employees, customers, shareholders,suppliers and the wider community. To arrive at such a balance requiressound leadership and decision making at the top of the organization, andin addition, clear channels of communication so that the interests of thevarious groups can be represented and taken account of.

In the smallest organization or unit with just one or two people (suchas a business start-up) the commonality of purpose between stakehold-ers is likely to be at its height, not least as far as the managers, the ownersand the employees are concerned, since they will be one and the same.Yet as an organization grows there is clearly scope for a divergence ofpurpose between these groups. In the case of employees, when an orga-nization grows to the point where they are numbered in tens of thou-sands, it is impossible to expect that everyone will share the same valuesor motivations, let alone (given the imperfections of any communicationsmedium) be the possessors of identical information concerning the per-formance of that organization.

The art of successful management is therefore about ensuring that anydivergence is minimized and the commonality of purpose is maximized.By successfully marrying communication to and from employees, themanagement team are more likely to have a motivated workforce thatshares their vision and values, and understands what is expected of themand how they in turn will benefit. Feeling informed and knowing thattheir opinions and views are valued is also likely to improve employeeattitudes and increase commitment to the organization. In the distillationof his work, The Essential Drucker, Peter Drucker (2001) succinctly sums

0-7494-4540-8_INTRO_1

up this fundamental task of management as making ‘people capable ofjoint performance through common goals, common values, the rightstructure, and the training and development they need to perform and torespond to change’.

In turn, the benefits of having a workforce full of employees withhighly favourable attitudes and commitment have been demonstratedby the WorkUSA® study (available from the Watson Wyatt website),which showed that the financial performance of such organizations istypically nearly four times better than the financial performance of com-panies with poor employee attitudes. Moreover, organizations withhighly favourable employee attitudes have been proven to better with-stand economic and other crises such as the most recent recession.

The aim of this book is therefore to demonstrate the role that marketresearch can play in these processes of communicating with and engagingemployees. As such it seeks to encourage those involved in market re-search to demonstrate to a wider audience the value of the techniquesthey have available to them. As well as offering market researchers theencouragement to become more involved in employee issues, the inten-tion is to delineate where traditional techniques have benefits and wherethere are limitations. The blind assumption that things work in just thesame way as they do in other areas of research is a dangerous one to make.

At the same time, it has to be recognized that there are many morepeople with an interest and involvement in the subject matter who willnot have had the benefit of a background or training in market research.So it is hoped that this book will demonstrate the advantages of followingthe sound principles and practices that have been developed under theauspices of the Market Research Society.

Apart from anything else, one of the joys of being involved in employeestudies is the range of issues that research can help with. The potential ofthis range is almost as broad as it is with consumer research. So anotherchallenge therefore in writing this book has been to constrain the numberof topics covered. Quintessentially, this is a book about involvement andparticipation because this is what research encourages and can facilitate.Not only can research help inform decisions about the form that partici-pation takes, it can also act as a form of participation itself.

The starting point for the book is an examination of the major reasonsfor, and the benefits to be derived from, conducting research amongstemployees. As with any other form of reason, the clarity of purpose withwhich such an exercise is framed is critical to its eventual success. Inaddition Chapter 1 references some of the management systems that havebeen developed in recent times and contributed to the growing interestin employee research.

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Chapter 2 develops the theme of the inter-relationships betweenemployees and customers, and considers the specific applications foremployee research in this context. The defining requirement for most or-ganizations is to meet the needs of their customers, and the continuedsuccess of the organization frequently depends on the interplay betweenemployees and customers. These relationships, including the extent towhich employee satisfaction is a necessary or sufficient condition ofcustomer satisfaction, are explored in this chapter.

Chapter 3 then goes on to examine the relationships between employ-ees and other stakeholders, notably those who own the organization.Relevant to these discussions are the efforts taken to involve employeesin the ownership and management of organizations, and the growingsignificance of attempts to place a financial valuation on the contributionof employees. Such efforts commonly appear under the label of humancapital, and some of the ways in which the valuation can be achieved areexplored.

Up to this point there are frequent references to the wider subject ofcommunications. Research and communications are inextricably linked,as they each offer mutual support to the other, while in any case researchitself is a form of communication both to and from employees. Chapter 4therefore considers the broader context of communications involvingemployees, highlighting the ways in which research complements othermedia as well as assisting with the strategic and tactical development ofcommunications overall.

This paves the way for Chapter 5 to describe the steps that need to betaken to get the most value out of a research survey. Traditionally, em-ployee research has relied on quantitative techniques, and it was normallyin a form that lent itself to being conducted online. Since online researchmethods have opened up many new opportunities but also need to beused appropriately, Chapter 6 is specifically devoted to them, highlight-ing when other approaches still represent a better option.

Less commonly used in the past, qualitative research offers tremen-dous advantages to organizations in gaining a better understanding ofthe attitudes and motivations of their employees. Chapter 7 thereforediscusses how qualitative research can be deployed to advantage, alongwith the particular considerations attached to conducting it amongemployees.

The final chapter then takes the thinking further by looking beyondthe conduct of research studies to a development that mirrors the con-sumer ‘insight’ movement. This advocates closer cooperation betweenthe owners of the different data sources covering employees, and the in-tegration of outputs from employee research.

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Following this chapter, Appendix 1 discusses the Information andConsultation Regulations, given the relevance of some of the issuescovered by this EU legislation.

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Conductingemployeeresearch: reasonsand benefits

1

INTRODUCTIONThe starting point for the book is an overview of the reasons for gatheringinformation from employees and the benefits of so doing. There is clearlya wide range of reasons why an organization would wish to conduct em-ployee research, so this chapter can only outline the most common.Indeed, the coverage is not exhaustive nor are the reasons mutually ex-clusive, while different organizations will seek to combine them in dif-ferent ways. The critical requirement is to be quite clear why the exerciseis being undertaken at all and what will happen as a consequence of it.

In addition, the foundations are laid for subsequent chapters which setout the principal ways in which the research will be conducted. Thealternative approaches, plus any other prerequisites for an effectivestudy, can best be examined against the backdrop of why the research ishappening at all.

The overview starts with the sort of feedback-gathering exercise thathas now become quite common in organizations and often goes underthe heading of an employee attitude or opinion survey. Frequently thesestudies are based around lists of statements with which respondents arerequired to register their strength of agreement. The coverage of such

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surveys and the ways in which the findings are applied have evolved overtime, so they are now likely to be as concerned with the linkages to busi-ness performance as with simply measuring employee satisfaction.

The evolution of this more traditional form of survey has reflected theincreasing complexity and pace of change in corporate life. At the sametime therefore there has been an expanding breadth and depth in thereasons for conducting research. The broader remit is evidenced in thegrowing involvement of employees in decision making and the manage-ment of change, for example when mergers or acquisitions are takingplace. Meanwhile, employee research has deepened as it has becomemore important, for instance, to consider cultural issues and to study newpriorities that have emerged such as the work/life balance.

In parallel with these developments, organizations have been seekingto benefit from various management systems and frameworks that havebecome available. A number of these, such as the balanced businessscorecard, are examined in the final section in this chapter since the focusthey have on employees as stakeholders has underwritten the importanceof conducting research amongst employees.

STATE OF THE NATIONHistorically, employee attitude surveys have been used as a managementplanning tool since they came to prominence in the early 1960s. Thesestudies have sought to provide organizations with information aboutsome of the fundamental people issues at a given time. The drive to obtainan understanding of employees’ attitudes will typically emanate fromthose responsible for people management in the personnel or HR func-tions. Inevitably therefore the common issues covered by such studiesinclude working conditions, reward and recognition, training and devel-opment, and other human resource policy areas.

Perhaps the most common questions to be found in such surveys areconcerned with job satisfaction, or happiness with the employing orga-nization. Some organizations seek to take a measure of morale or pridein the organization, but almost all ask something along the lines of ‘Howsatisfied would you say you are with your current job?’ Employees arethen invited typically to indicate whether they are very satisfied, fairlysatisfied, neutral, fairly dissatisfied or very dissatisfied. Other commonareas of questioning include attitudes towards the management andleadership of the organization as well as the effectiveness of internalcommunication.

Inevitably, within the confines of any type of research, taking the tem-perature on such a wide range of topics means that there is limited scopeto investigate any one in depth. Yet, for some companies, these surveys

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represent their only formalized and direct means of evaluating employeeopinion and feedback. As such the results will enable broad areas ofstrength and weakness to be identified so as to assist with strategic de-velopment in any of the areas listed, as well as communication generally.

PRIORITIZING MANAGEMENT ACTIONAs well as recording employee opinion on specific issues, surveys can beused to target and prioritize matters that require management action bydetermining those that employees regard as being in need of most urgentmanagement action. By collecting data from a large number of individu-als it is possible to generate results that are robust and enable decisionsto be made with confidence, knowing that they represent the views of agood cross-section of the workforce.

Apart from giving a summary snapshot of how people feel aboutworking in the organization, the sort of data gathered in employeesurveys can be analysed in a way that identifies those factors that havethe greatest impact on core employee measures, such as satisfaction,motivation or commitment. Without asking directly what is most impor-tant to employees (some of whom may have difficulty in prioritizingcontributory factors in any case), an analysis can be performed to seewhich of the other variables or parameters in the survey influence ordrive the particular measure. Hence the approach is known as key driveranalysis. It is discussed at more length in Chapter 8. Having identifiedthese key parameters the organization can then seek to align its offeringto employees.

Another example of an analysis that can be performed comes from thepaper given by Sheldon et al to the 1996 MRS Conference, which wasconcerned with the use of the stated preference technique. In commonwith many other organizations, London Underground used this ap-proach to optimize the allocation of scarce resources in their investmentdecisions, taking into account customer preferences. It was thereforewithin this context that they decided to take a similar approach to staffinvestment and remuneration issues. They wished in particular to eval-uate the relative monetary values that their staff placed on componentsof the total remuneration package (including working hours, clothing,and travel allowance).

The technique requires respondents to choose between a series ofoptions, presented in pairs, with each option typically describing a pack-age of features. Repeated choices are based on a statistical design so thatthe data analysis can derive the relative importance and potentially themonetary value of various features.

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MANAGING RESPONSE TO CHANGESince employee research first became common, increasing competitivepressures have resulted in volatile and challenging times for the workingpopulation. Successful change management has become an essentialprerequisite for survival in a rapidly evolving marketplace. In turn,understanding employees’ responses to change has been increasinglyrecognized as essential to managing change effectively. Research is ofparticular value in gauging people’s reaction (and the extent of anyresistance) to the many changes affecting the workplace, such as theimpact of new technologies, business process re-engineering anddownsizing.

Then again there are the changes brought about by strategic align-ments and acquisitions or mergers. Such developments can take manyforms, and may involve companies that do similar things joining forces,or the combining of organizations that operate at different points in thesupply chain (in the jargon, either horizontal or vertical integration). Inaddition, organizations may seek to join forces while retaining their sep-arate entities or creating a new one. Depending upon the strategy it isevident that some of these situations can have a greater impact on theworkforce (for example, horizontal integration of similar companies andthe creation of one entity where there once had been two or more).

However, if not handled well, any of these situations can lead to thereal possibility of the workforce deciding to withdraw their labour or evento leave, if they do not feel engaged by the strategy or have not beenadequately informed of the intentions. It is also the case that clashes ofcultures occur when organizations are joined together, and all too fre-quently anticipated synergies are not realized. By ascertaining fromemployees what their understanding is of, and how they perceive,developments as they unfold, it is possible to manage the situationand retain the involvement and commitment of employees through theprocess.

CASE STUDY

On either side of the millennium Total merged with first PetroFinaand then Elf Aquitaine to become TotalFinaElf, before the companywas renamed as Total in 2003. Inevitably, the mergers broughttogether different cultures and management styles, and led to asubstantial number of redundancies as functions were combined.

Total UK, the marketing and distribution arm in the UK, realizedthe importance of giving (and being seen to give) all staff in the

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merged company the opportunity to have their say, and thereforeinstituted a company-wide survey of staff attitudes. The success ofthe initial exercise led to it being repeated annually, and its de-velopment offers a number of pointers for the successful conductof such surveys.

Although there had been some suspicion about how confiden-tial the survey might be, repeated reassurance on this aspect, andthe fact that it was being handled by a specialist research com-pany, overcame the problem. Indeed, through the use of a quali-tative stage of research prior to the main study, employees hadbeen able to contribute many of the questions that were beingasked, giving them a strong perception of ownership. Moreover,by reporting back with the results and action plans employeeswere able to readily appreciate that their views were being lis-tened to.

With successive surveys the involvement of employees at a morelocal, functional, level increased as results were reported, dis-cussed and incorporated into planning at all levels, not just theoverall company level. Another achievement that was implicit inthis outcome was the acceptance that the results were undeniablytrue; whether they were liked or not, it had to be recognized thatthey were an accurate reflection of how people felt, and not some-thing to be shrugged off and ignored.

Over time the ambition of the survey has increased as it hasbecome an integral part of the company’s communication activi-ties and has contributed to the unification of the legacy companies.As the new entity moved away from the early, pragmatic, costconsiderations through to the creation of a new identity with a setof employee-oriented (and generated) values, there was also adesire to compare performance with other companies. Total optedfor the benchmarking capability available from the SundayTimes 100 Best Companies to Work For Awards, recognizingthat some loss in comparability of their own questions over timewould be matched by the benefits of being able to make externalcomparisons.

Importantly the development of the survey has also assisted inthe development of managerial skills, as local management weremade aware of issues that needed to be dealt with and benefitedfrom the participation of their teams in resolving those issues. Itssuccess has also helped persuade the Group to do something ona global scale, while the only downside is that interest in doingadditional surveys at departmental and functional levels has had


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to be checked for fear of employees spending all of their timecompleting questionnaires.

Other developments or plans that can benefit from seeking the views ofemployees, and which are increasingly evident in corporate life, are con-cerned with rebranding and/or repositioning. In an article about the lawfirm Ashurst Morris Crisp (Daily Telegraph London, 1 April 2004), StefanStern described how the company had consulted with their staff over an18-month period on what the firm’s core values were perceived to be. Thisenabled them to fine-tune a new brand identity that reflected the viewsof the people who worked in the firm, and they did so in a way that wasiterative and incremental, allowing a broad consensus to develop.

In addition to proactively evaluating likely reactions to new develop-ments, and so helping to shape how change can best be managed andcommunicated, employee research can also provide a useful tool formonitoring how effectively change has been implemented.

CULTURE MAPPINGMentioned in passing above, and cutting across many of the issues in thisbook, is the subject of culture change. With countless books and articlestaking a cultural perspective on management and organizational change,some companies have begun to take a broader view of attitudinal re-search, switching their attention to the group values and belief systemsthat underlie prevailing patterns of thought and behaviour.

Culture mapping (or profiling) seeks to identify, and then measure, thekey cultural parameters within an organization. This form of researchprovides managers with a more objective answer to questions such as,What kind of culture do we have now? What kind of culture do we want?How successful have we been in shaping the culture of the organization?Where are the gaps between where the culture currently is and where weneed it to be? It is therefore the sort of topic that warrants both a qualita-tive as well as a quantitative dimension to any research.

In one sense, attempting to define the culture of an organization is likesearching for its DNA, except that the process is less exact and more ofan art form than the approach used by scientists. Indeed, culture is notsomething that is static; it is dynamic and unpredictable, and so an auditmust be recognized as being a helpful snapshot rather than as a definitivestatement.

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Culture is an amalgam of many aspects including the personal beliefsof individuals, the moral and ethical codes of the organization, and thebehavioural norms and the rituals that take place. These are manifest inthe language and jargon of the organization; the style and design of itspremises; the reward systems; the extent to which there is an ethos of teamworking and the way in which decisions are arrived at; how open com-munication is, whether information is generally shared and the extent towhich employees are encouraged to develop themselves; the acceptabil-ity of staff turnover and the type of people recruited; and whether theprimary focus of the organization is on external stakeholders rather thaninternal processes. While some of these manifestations can be observed,many of them lend themselves to being measured through survey re-search techniques.

WORK/LIFE BALANCE, HARASSMENT ANDSTRESS

Outside of changes driven by commercial pressures, there are a numberof issues now regularly included in employee surveys that reflect changesin society more generally. Attitudes to work itself change, and with suchchange come new norms and expectations. Hence work/life balance is atopic that is more regularly addressed, as is harassment, whether in re-lation to gender, religion, disability or ethnicity.

Indeed, by collecting under a general heading of demographic infor-mation such details as gender, religion, disability and ethnic origin,research surveys can be the best source of data about the diversity in theworkforce that an organization has. Such data collection carries with itgreat responsibilities, since if the survey gives too detailed a picture ofrespondents, they could be identified from their answers, destroying anynotion of anonymity. A balance has therefore to be struck between gath-ering enough detail to assist with any analysis and interpretation, and notasking for so much that anonymity could be compromised.

Increasingly stress, defined as ‘the adverse reaction people have to ex-cessive pressure or other types of demand placed on them’, is becominga factor that has to be dealt with, whatever its cause. According to researchconducted by the Health and Safety Executive (HSE) in the UK, and to befound on their website, it is estimated that up to 5 million people in theUK (about one in five of the total workforce) feel ‘very’ or ‘extremely’stressed by their work; while work-related stress costs society about£3.7 billion every year.

Stress is something that can have a multitude of origins, be verysubjective in the way in which it is experienced, and not necessarily be


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caused by any factors under the control of the employer. However, sinceit will impact on the capacity of an individual to work, there are clearbenefits to be gained from understanding it and dealing with the causes.Indeed, the HSE has established six standards designed with a viewto improving performance through better management of contributoryfactors.

These standards are concerned with the demands placed on employ-ees; the understanding of their role and responsibilities; the amount ofcontrol they have over the way they do their work; the information andsupport they receive from their colleagues and superiors; and the qualityof working relationships (that is, the absence of unacceptable behaviourssuch as bullying). The final standard emphasizes the need for employeesto be engaged frequently when the organization is undergoing any or-ganizational change.

CASE STUDY

For a major UK retailer, stress (as observed in terms of absenteeismand sickness levels) was becoming an increasingly major chal-lenge for the business. With the assistance of Right ManagementConsultants, it therefore sought to link employee attitude surveydata generated in response to statements such as ‘Stress of workis affecting me in my job performance’ with sickness and absen-teeism data as recorded by the HR information system, across 500stores.

The subsequent analysis showed, possibly not too surprisingly,that stores that had a high score on such questions tended to bethose with the highest sickness and absence levels. However whenthe analysis was taken further it was found that there was a strongcorrelation with some of the issues identified in the above stan-dards, such as the performance of line management and thesupport provided, along with the extent of workloads.

Furthermore, an examination of the customer satisfaction mea-sures by store (gained through a mystery shopping exercise)revealed that those stores with poorer customer satisfaction tendedto be those with relatively high levels of sickness. This then madeit possible to estimate the cost savings that could potentially beachieved by lowering the high level of sickness and absence ob-served in certain stores to a more typical level. The stores weregrouped into three approximately equal-sized groups dependingon their levels of absence and sickness.

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The stores with the highest levels of sickness and absence hada gross profit margin that was, on average, 0.5 per cent lowerthan stores with average sickness and absence levels. In fact thedifference in contribution between the ‘high absence’ and ‘mediumabsence’ groups was £30,000 per year per store. A potential costsaving of over £5 million was therefore achievable if sickness andabsence levels in all 170 stores in the ‘high absence’ group couldbe managed downwards to the level of the ‘medium absence’group.

Having aimed to reduce absenteeism and poor customer satis-faction by addressing stress levels, the company was in a positionto do so by identifying and amending the contributory factors.

BENCHMARKINGWhen an organization first undertakes an employee survey there isunderstandably a desire to know how the results compare with otherorganizations. Without such a benchmark or prior experience of run-ning such surveys it can be difficult to interpret the data. Is the figure of60 per cent of employees agreeing with a statement good or bad?

Clearly if the usual result elicited by other organizations from a specificquestion is around 30 per cent (and the statement has been positivelyworded), then agreement at the 60 per cent level is indeed welcome, andprobably suggests that this is not a cause for concern. Alternatively, ifresults are normally seen at around 90 per cent, then the organization islikely to make this an issue to be addressed promptly.

In order to give confidence in such comparisons, there are a numberof basics that need to be in place. The most obvious is that the same ques-tion has to be posed to employees in all of the different organizations.While this does not sound hugely onerous, by setting out with the inten-tion of comparing results with other organizations it is possible to losesight of the issues that are pertinent to the organization itself and its em-ployees. So care has to be exercised that the agenda is not determinedsolely by other organizations, as it could simply mean that the wrongquestions are being asked, and the comparative data is therefore obtained,but irrelevant.

In addition to asking the same questions to ensure the validity of anycomparative results, it is also necessary to check that they have been askedin the same way. Differences in methodology can affect how an individualresponds to a question, most obviously when the difference is between aquestionnaire that is administered by an interviewer and one that is


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completed by respondents themselves. Note that there could also be amargin of error attached to the results if only a sample of employees isinvited to take part, as opposed to a census of all employees.

A further consideration here is whether the questions have beenasked in the same sequence. The ‘order effect’, as it is known in marketresearch, can have a very significant impact on the way in which the samequestion is answered. Perhaps one of the best examples of this comesfrom the popular television series Yes, Minister. The Permanent Sec-retary Sir Humphrey Appleby takes the Principal Private SecretaryBernard Woolley through two lines of questioning, both of which endwith the question ‘Would you oppose the reintroduction of NationalService?’ (National Service was effectively conscription into the armedforces for a specified period of time.)

In one sequence the questioning starts with the respondent being in-vited to say whether he is worried about the number of young peoplewithout jobs, before going on to discuss crime and the need for disciplineamongst young people. The second sequence begins with a questionabout the dangers of war, and then covers the growth of armaments andthe dilemma of giving young people guns and teaching them how to kill.Inevitably this sequence elicits a different response to the final question!

A further point that needs to be emphasized about external bench-marking data is the importance of knowing which organizations, or atleast types of organization, make up the benchmark, and the timing ofthe surveys that contributed to it. Otherwise it may be possible that thebenchmark data comes from organizations in completely different sec-tors, or that the other surveys took place some time ago and in differentcircumstances.

It is sometimes overlooked that a very powerful source of benchmark-ing data can be found within the organization itself, especially if it is madeup of a group of companies. Even a stand-alone organization is likely tohave a structure involving regions or functions or divisions, which facil-itates comparisons. By ensuring that each part of the organization is askedthe same questions at the same time it will be able to identify best practice,which can then be shared across the organization.

KEY PERFORMANCE INDICATORSAs part of the process of making broad comparisons across different partsof an organization, it has become increasingly common for companiesto combine a range of scores from the employee survey into a singlesummary indicator (often called the employee satisfaction index). Thisapproach also makes it easier to analyse the relationship between

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employee opinion/satisfaction and other indicators used to measure theperformance of the organization.

Part of the impetus to present data in this way has come from thegrowth in the use of balanced business scorecards, which are discussedmore fully later in the chapter. Meanwhile, a good example of the way inwhich survey results have been used in the performance managementprocess was presented to the 1999 MRS Conference by McClymont andBriggs. They reported on the development of an employee attitude surveyat Sainsbury’s. From its inception in 1996 to the time of their paper, thesurvey had evolved from providing a voice for employees to becomingan established part of the company culture itself.

McClymont and Briggs were able to demonstrate that the survey hadbeen used to drive change programmes as well as providing input toperformance management systems. These systems provided for man-agers to have targets which were set and reviewed on a regular basis.These targets reflected the overall business strategy, and ensured thatthere was a clear and consistent framework for the business to move for-ward. The survey provided the people measures, and so ensured thatmanagers took full account of the people dimension alongside all of theother parameters that they were being assessed on.

When employee surveys are used in setting management targets andmonitoring performance, employee research is placed at the heart ofbusiness performance measurement, especially if the further step is takenof linking results to managerial bonus schemes. However, caution isrequired in using such surveys as a tool for examining individual levelsof competence, or rewarding line managers when those results are basedon the views of their teams. Quite simply, such surveys could be open toabuse or interference in the process, as managers exert undue influence(either positively by being ‘nice’ in the survey period or negatively bybullying employees).

As with any such scheme, care has to be exercised that those be-haviours that can be measured (and hence targeted) are the correct ones.Targets can certainly force a change in behaviour, but it must not be atthe risk of an adverse effect on other desirable behaviours.

BALANCING TOP-DOWN COMMUNICATIONSThe very process of undertaking an employee survey is itself part of awider exchange of information between management and staff. It istherefore more than just a vehicle for extracting information fromemployees, and as such employee research performs a valuable role inhelping to complement the top-down flow of communication within anorganization.


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If correctly managed, employee research can help to demonstrate thatsenior managers regard employees as having an important contributionto make to the planning process, and are concerned about tackling theissues they raise. In addition, surveys can provide a further mechanismfor generating ideas and suggestions.

WIDENING THE IDEAS POOLOne of the other means of upward communication is a suggestionscheme. For such a scheme to be successful there must be in place anefficient and continuous process for handling the volume of suggestionsand deciding on those that merit implementation. The use of an employeesurvey offers an alternative approach, by ensuring that good ideas areinvited and fed back to decision makers at the centre of an organization.

As part of the information yield from a survey, the suggestions andideas can be separated out and dealt with in a one-off examination by themanagement team, who can decide which to support and bring tofruition. When great emphasis is placed on innovation and continuousimprovement, it is surprising how often companies overlook the oppor-tunity employee research offers to tap into the knowledge and experiencethat exists at all levels in an organization, especially those employees whoare directly customer-facing.

Such benefits become even more evident in the use of the full range ofresearch techniques, such as focus groups and ‘team listening’ sessions,which are also valuable in promoting the role that staff can play in tack-ling problems and identifying opportunities for improvement.

In addition to providing a conduit for positive suggestions, surveyscan play an equally important role in innovation by identifying problemareas. In his article ‘Why workers across the EU are simply givingup’ (Daily Telegraph London, 7 October 2004), Brian Bloch cited the ex-ample of a large German manufacturing company. Having experiencedfalling productivity and profitability, the company brought in consul-tants and imposed a series of draconian controls. Unfortunately theintroduction of these controls simply exacerbated the problem and led toa spate of resignations. It was only when the top-down style of manage-ment was recognized as causing the problem, and replaced by a moreopen dialogue with employees, that more effective controls were intro-duced, leading in turn to a rise in profits. Had regular employee com-munication been in place beforehand, there would have been an earlywarning system that would have more readily identified the problem,along with a solution.

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INTERNAL COMMUNICATIONS AUDITSIn looking more generally at the overall pattern of communicationswithin an organization, employee research can also provide a usefulmeans of assessing the relative effectiveness of each element within thecommunications mix. Organizations usually communicate throughmany different channels (face to face, telephone, e-mail, intranet, video,company magazine and so on). Evaluating how employees use these me-dia, and which they prefer to use for different types of information,provides a vital foundation for effective and cost-efficient managementof internal communications, including testing perceptions of manage-ment messages, the communication style and feedback mechanisms.

Subsequently, once it has been decided which media should be de-ployed to communicate specific messages, research offers the opportu-nity to harness the views of employees regarding specific executions andtreatments, much in the same way that customer research is an importantbuilding block in the development of external communications. Theimportance of this subject matter is such that it is explored in more detailin Chapter 4.

EXTERNAL COMMUNICATIONSSimilarly, in a theme that is also developed later in the book, advertisingaimed at external audiences regularly receives inputs from employees atboth the strategic development and the executional stages of a campaign.With the development of the stakeholder philosophy, such an approachis equally applicable in areas other than direct communication with cus-tomers through advertising. One of the earliest examples used to illustratethe wider benefits of such an approach was reported by Bob Worcesterin his paper to the MRS Conference in 1973.

In his paper Worcester referred to various case studies pertaining toorganizations that were using employee research in conjunction with anexamination of how they were perceived externally. These case studiesoften focused on those categories of employees (such as salespeople) whoworked directly with customers or other stakeholders. One particularcase study referenced was groundbreaking in its subject matter as well asits scope: the employees of Standard Oil (subsequently to become Exxon)were asked about their employer’s effectiveness at controlling pollution.

The study, which was conducted in 1972 by Opinion Research Corpo-ration of Princeton, asked employees about the company’s commitmentin this area as well as the effectiveness of its communications. Althoughmany employees considered the company to be highly committed toenvironmental conservation and viewed the information it provided as


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being very credible, they nevertheless felt that both internal and externalaudiences were poorly informed about its pollution-related activities. Thefindings prompted developments in both internal and external commu-nications, notably in focusing on what the company was actually doingin this area, as well as providing inputs to the entire conservationprogramme.

SUCCESSFUL RECRUITMENT AND RETENTIONLooking further out, employee research need not be restricted to currentemployees. Many companies use research to understand the perceptionsand attitudes of potential employees. At a time when the market forskilled staff is becoming increasingly competitive, and the terms ‘em-ployer of choice’ and ‘the war for talent’ are becoming increasinglywidespread, the additional insight that this research provides can be cru-cial in determining the success of recruitment initiatives.

In addition to evaluating the opinions of potential recruits, researchcan also provide valuable insight into the reasons that staff leave a com-pany. Exit interviews conducted by the HR department or independentagencies can be used to assess the ‘push’ and ‘pull’ factors governing staffturnover, enabling companies to respond accordingly. Indeed, within anemployee survey questions concerned with intentions to remain with orto leave the organization can be very powerful business indicators formanagement.

CUSTOMER AND BUSINESS ALIGNMENTAs is discussed in more detail in the next chapter, many companies con-duct both customer satisfaction surveys and employee attitude surveys.By coordinating these two activities it is possible to determine how staffsatisfaction, motivation and commitment affect customer satisfaction andtherefore business performance. In more immediate terms, they can beused to identify gaps that exist between staff perceptions of the servicethey deliver and customer perceptions of the service they receive, en-abling companies to prioritize (and demonstrate to staff) the aspects ofservice that most require improvement.

In addition to the service delivery issues, employees potentially havea significant contribution (which is normally beneficial, but can be detri-mental if not managed well) to make to the process of product develop-ment. In the Financial Times (22 October 2001) Chan Kim and ReneeMauborgne of Insead noted the role played by employees, in this instancethe sales force, in the failure of a product launch by Burmah Castrol.

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The company had devised an innovative system for water coolantsused in metalworking industries. Previously customers would have hadto choose between several hundred types of complex coolants, involvingtesting options on production machines. The expert system developed byBurmah Castrol was therefore able to save time, effort and expense allround by synthesizing the collective knowledge and expertise in the com-pany. Not only did customers stand to gain from a greatly diminishedfailure rate, they also were being saved money.

Unfortunately the sales force, who had not been involved in the de-velopment process, viewed the system with some suspicion, as it effec-tively removed what they considered to be a major source of jobsatisfaction (derived from their role in fine-tuning the coolant that thecustomer ended up purchasing). They therefore felt threatened, opted towork against the system, and sales did not take off.

The lack of perceived fairness and involvement consequently wreckeda product which otherwise appeared to offer substantial benefits to thecompany and its customers. If the workforce had been consulted and theirconcerns addressed this failure could have been averted, and the com-pany could have had a hugely successful product launch.

BUSINESS MODELS AND QUALITY SYSTEMSPart of the imperative to look at the full range of stakeholders has comefrom the integrated nature of many business models and quality systemsnow being used by organizations. Given the importance of these modelsand systems to the interest in and growth of employee research, it is worthexamining four leading examples in more detail. Interestingly, they wereall developed in the period around 1990.

Investors in PeopleInvestors in People (IiP) is a national quality standard developed in theUK which sets a level of good practice for improving an organization’sperformance through the training and development of its people.

The standard was originally based on the four principles of com-mitment, planning, action and evaluation. As such it represents a plan-ned approach to setting and communicating business objectives anddeveloping people to meet these objectives. The result is a framework formatching what people can do, and are motivated to do, with what theorganization needs them to do. By ensuring that such activity is repeatedon a cyclical basis a culture of continuous improvement should beengendered.


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Given the need to provide evidence for the assessment, along with theprinciple of evaluation, IiP has contributed to the growing awareness ofthe need to obtain direct feedback from employees.

European Foundation for Quality Management(EFQM) Excellence ModelIn the same way as the Baldridge National Quality Awards in the UnitedStates recognize the successful implementation of total quality manage-ment (TQM) principles, the EFQM introduced the Excellence Model asthe framework for assessing applications for the European QualityAward. Since then it has been widely used as a management system, no-tably assisting organizations by providing them with a framework thatallows them to undertake self-assessment. As a consequence they canunderstand any gaps in performance, then identify and implementsolutions.

The model is based on nine criteria, which can be divided into five‘enablers’ (what an organization does) and four ‘results’ (what an orga-nization achieves). ‘Results’ are caused by ‘enablers’, and feedback from‘results’ helps to improve ‘enablers’.

The model can be summarized in the statement that ‘Excellent resultswith respect to performance, customers, people and society are achievedthrough leadership driving policy and strategy, that is delivered throughpeople, partnerships and resources, and processes.’

As with IiP there is strong encouragement to gather direct feedbackfrom employees, pertinently in the people results area. This area is in turndivided into two subsets of perception measures (of particular relevancehere since they include evidence relating to motivation and satisfaction)and performance indicators (the internal ones used by the organizationto monitor, understand, predict and improve the performance of the or-ganization’s people and to predict their perceptions).

CASE STUDY

The advent of TQM provided a boost to employee communicationsgenerally as well as research specifically. One early case studythat demonstrated this was provided by Ruth McNeil in ‘Staff re-search and total quality management – looking in the mirror’, apaper presented to the 1993 ESOMAR Congress. The case studyconcerned UML, then a subsidiary of Unilever, supplying waterservices to other group companies in the north-west of England.

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As part of the introduction of the TQM philosophy, the companywished to explore how people felt about the company, their desirefor change, and most importantly how they might contribute to thisprocess. Research was conducted in two stages. The first wasqualitative in nature, and encouraged those involved to put them-selves in the position of senior managers so that they could thinkabout how they would change the company.

This was followed by a quantitative stage which enabled all 200employees to participate. The end product of the research was araft of initiatives concerned primarily with improving communica-tion across the company. Managers instituted more frequent meet-ings, both formal and informal, to create opportunities fordiscussions with staff. The minutes of the executive committee weremade available to all staff. Awards were granted in recognition ofthose who put forward suggestions or implemented new initiatives.Appraisals were introduced for all staff.

Other developments included training plans for all staff, alongwith such things as the creation of a social committee and im-proved working conditions. Two years on, the profitability of thecompany had improved, and it undertook another study to checkon progress in the eyes of the employees and to identify furtherareas of improvement. This fact alone contributed to an appreci-ation among employees that the company was interested in theirviews and recognized the essential contribution they were makingto its success.

Balanced business scorecard (BBS)Devised by Kaplan and Norton at Harvard, and first reported in theHarvard Business Review (1992), the BBS is a management system thatseeks to balance the traditional reliance on inevitably backward-lookingfinancial measures by incorporating perspectives that are more forwardlooking.

There are four perspectives that make up a BBS. Firstly there is thelearning and growth perspective, which is concerned with people beingin a continuous learning mode through the deployment of mentors, in-tranets and so on, as well as training. Next is the business processperspective, which is about internal business processes, which can in turnbe subdivided into mission-oriented processes and support processes.The third perspective is the Customer perspective, focusing on the cus-tomer and primarily concerned with customer satisfaction. Finally there


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is the financial perspective. Although the concept seeks to balance thetraditional emphasis placed on this area, it clearly is not deemed to beunimportant. Rather it is seen as a perspective that needs to be balancedby the other considerations.

From the above it is clear that some of the metrics used to assess per-formance, particularly in respect of learning and growth, which hassubsequently acquired the shorthand expression in business parlance ofthe ‘employee perspective’, feature views and opinions gathered fromemployees.

One of the additional benefits for a business that seeks to integrate therelevant information sources in this way is that it facilitates a deeper un-derstanding of, say, the linkages between employees and customers. Alltoo often data concerning different audiences is the responsibility of dif-ferent functional areas.

By way of an example, if HR is the commissioning agent for an em-ployee survey, Marketing is likely to be responsible for a customersatisfaction study. Without the imperative to integrate the results, thesesurveys are very likely to be undertaken at different times and involvesampling points that are not comparable. Even if all employees take partin a survey, the customer base of most organizations is such that only asample will be approached, and the way in which the data is collectedmay not permit analysis by outlet, or be compatible in terms of geograph-ical area, for instance. A coordinated plan for all such research thereforehas the benefit of permitting much more extensive analysis to be under-taken, improving the quality of the business decisions that have to bemade.

Burke/LitwinWhile the excellence model above considers inputs and outputs as theyrelate to business performance, the model developed by Burke and Litwinin 1992 is concerned with organizational change, and examines the rela-tionship between individual performance and that of the organization asa whole. It too divides the factors contained in it into two categories; herethe categories are labelled ‘transformational’ and ‘transactional’.

The four transitional factors are the external environment, mission andstrategy, leadership, and culture. Changes in the latter three are deemedlikely to be caused by direct interaction with external environmentalforces, and are consequently likely to affect the organization and thosewho work in it fundamentally. These factors are in effect those that createthe climate for change.

The remaining eight factors are the transactional ones, whichare more about the day-to-day operations of the organization, andas such represent the end product of any change. The factors are

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structure, management practices, systems (that is, policies and proce-dures), work unit climate, motivation, task and individual skills, indi-vidual needs and values, and finally individual and organizationalperformance.

The way in which change is achieved in this second category ismore likely to be by way of continuous, incremental and evolutionaryimprovements. Another way of characterizing the difference betweenthe two categories of factors is to associate the transformational oneswith leadership of the organization, and the transactional ones withmanagement.

The model also specifically recognizes that each of the factors interactswith some of the others. For instance, the motivation of individuals willinfluence the work unit climate as well as being affected by it. It is there-fore an example of a model that helps to explain how change has occurredas well as how it might occur in the future. This means that the model canbe directly helpful in the specification of the content of an employeesurvey.

CONCLUSIONSCollectively these approaches and models, although by no means ex-haustive, emphasize that the measurement of the opinions of employees,alongside those of customers and other stakeholder groups, is crucial tothe improvement of business performance. Indeed, some organizationsare now linking employee opinion data directly to business data such aslevels of profitability growth and talent retention.

As well as contributing to the management of change, research shouldbe integral to the strategic development and tactical execution of com-munications, whether these are directed internally or externally. Morespecifically employee research can make a contribution by identify-ing how best to increase levels of staff satisfaction, motivation andproactivity.

It can generate cost savings in recruitment and training by helping toreduce staff turnover. Cost savings can also be achieved because researchhas facilitated more effective recruitment practices or the identificationof inefficient and wasteful practices. Employee research can additionallyprovide early-warning signals of problems that would otherwise resultin disputes and the loss of productivity.

Beyond these benefits, research should be an integral component in thedevelopment of new and profitable products and services, as well as theprovision of enhanced customer service, with the attendant benefits ofincreased customer loyalty and sales.


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Employees andcustomersatisfaction

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INTRODUCTIONIn terms of expenditure on market research, the amount devoted to theattitudes and behaviours of customers dwarfs that concerned with em-ployees. Yet of all the interactions between groups of stakeholders, theone between the employees who literally embody the organization andits customers is perhaps the most critical to the organization’s success. Assuch, there is enormous potential for employees to give input to decisionson ways in which the organization presents itself to customers. Thischapter therefore goes into more detail regarding the relationships be-tween employees and customers, what can be done to make them work,how research can help, and specifically whether employee satisfaction isa sufficient as well as a necessary condition for customer satisfaction.

It is an apparently obvious assertion that ‘happy employees meanhappy customers’, particularly in the service sector, where often thebrand or delivery point is the individual employee who interacts with thecustomer. Indeed, there are plenty of examples in a sector like financialservices (from retail banking to insurance) of customers who maintain arelationship with an individual account manager even though that personhas moved to another office in a different part of the country.

However, some people are still looking for the evidence to support theassertion. For an article on the Quality Digest website, ‘Happy employeesdon’t equal happy customers’ (1988), H James Harrington examined the

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lists of organizations that appeared in Fortune magazine: Fortune 500,America’s Most Admired Companies, American Customer SatisfactionIndex and 100 Best Companies to Work For in America, and did not findthe high levels of correlation between these lists that he anticipated. Thisof itself does not disprove the conventional hypothesis, but it does meanthat the subject requires further examination and consideration. It isworth starting by examining the permutations of happy and unhappyemployees and customers.

UNHAPPY EMPLOYEES AND UNHAPPYCUSTOMERS

There can be few people who would advocate a policy of deliberatelymaking employees unhappy. Even before considering the impact on cus-tomers it is evident that unhappy employees represent a real cost toorganizations. A report produced by the Hay Group (2001) showed thatthose employees who are dissatisfied with their lot at work are muchmore likely to exhibit withdrawal behaviours such as absenteeism as wellas to resign.

In an aggregation of data covering a million employees worldwide, theauthors of the report also concluded that typically a third of all employeeswill have left an organization within two years of joining it. Turning thisinto a quantification of the costs to an organization, they adjudged it torepresent 10 per cent of revenues or 40 per cent of profits.

Such costs do not include an allowance for other impacts on the busi-ness, such as the effect on colleagues whose morale is lowered by theviews and behaviours of those contemplating resigning, or the dangersto systems and security caused by the actions of mischievous employeeswho are about to leave and no longer bother about the fortunes of theirerstwhile employer.

While it is not possible (and probably not desirable) to eliminate em-ployee turnover completely, this cost quantification clearly demonstratesthat a reduction in employee turnover could indirectly benefit customers,say, through lower prices. Where there is direct contact between employ-ees and customers, less frequent changes in employee turnover shouldalso yield benefits in terms of the improved servicing that comes fromcontinuity of contact. Frequently the information that characterizes andsustains a relationship between a customer and an organization is infor-mation in the heads of individuals working for the organization. Thisinformation could therefore be lost to the organization should any ofthose individuals leave.

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The Hay Group article (2001) also provided evidence that non-monetary considerations (such as the opportunity to fully utilize skillsand abilities, and the desire to be part of a team that is ably led and di-rected by capable management) can be more motivating and encourageretention better than monetary considerations.

Disproving the hypothesis that unhappy employees mean unhappycustomers might go a long way towards providing support for the vir-tuous circle that is represented by the positive version of the link betweenhappy employees and happy customers. Finding the data to demonstratethe negative version is more difficult, as it would appear that such situ-ations do not make great case studies.

It is nevertheless possible to find examples of organizations with bothunhappy workers and unhappy customers. Indeed Scott Paton followedHarrington’s piece by postulating in 1999 the reverse hypothesis, thatunhappy customers will lead to unhappy employees unless the organi-zation establishes systems and procedures to minimize unhappy cus-tomers. In support of this argument he cited a typical scene at an airlineticket counter where an irate customer is hurling abuse at a reservationagent, who objectively has no control over delays such as those causedby fog or mechanical failure.

Consider too the takeover battle during 2003 in the UK for the super-market chain Safeway, which took a long time to resolve because the bidswere referred to the Competition Commission in view of the consolida-tion that could result in this important sector. The length of time beforethe eventual winner, Morrisons, was able to take control and resumemanagement of the business meant that the chain lost its way and marketshare, while inevitably employees suffered from the prolonged uncer-tainty about their own futures.

Another possibility that should be considered here is the situationcaused by a problem customer and the impact upon employees. Bitner,Booms and Mohr (1994) considered certain situations based on problemcustomers, and discussed the notion that the customer is not always‘right’ or ‘king’. Recognizing this clearly has implications for those orga-nizations that have built their strategies around this concept, if they havenot also equipped their employees to deal with the minority of occasionswhen the customer may indeed be overly aggressive, upset other cus-tomers, seek to conduct illegal activities or in some other way pose aproblem. Increasingly the evidence of this occurring can be seen in thesigns (notably in retail establishments and public offices) requesting thatcustomers do not show aggression towards employees.

Another manifestation can be seen in the extent to which the subject ofabuse has become a regular item on many employee attitude surveys.Abuse of and discrimination against employees on such grounds as

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gender, sexual orientation, ethnic origin and religion is not limited to thatfrom other people working for the same organization. The abuse can anddoes come from customers or members of the general public.

UNHAPPY EMPLOYEES AND HAPPYCUSTOMERS

In 2001 Robert Sinclair and Carrie Lavis, psychologists at the Universityof Alberta in Canada, reported on their study of four groups of employeesbuilding circuit boards used in electronic equipment. They found thatalthough sad employees were not more productive in terms of their out-put volumes, they did make half as many mistakes as their happiercounterparts; so fewer boards failed quality tests, which again must resultat least in an indirect benefit to customers.

Apparently these less than happy employees channelled more energyinto their work than their happier counterparts, who were deemed by theauthors to use a lot of their energy and attention maintaining their cheer-fulness. It seems entirely plausible that sad people may devote moreenergy to their work in order to distract themselves from their sad feel-ings, while happy workers are more likely to think of their work assomething that could damage their happy mood.

This begs a question about the nature of the unhappiness felt by theemployees, since the reasons clearly can be manifold and are not neces-sarily work-related. Unhappiness can exist for personal reasons, and canbe a long-term feature of that employee’s personality. As Judge, Bono andLocke (2000) reported, dissatisfaction can stem from low ‘core self-evaluation’ (low self-esteem, low self-efficacy, an external locus of con-trol, and neurotic thinking). It has been shown that core self-evaluationsmeasured during childhood can predict job satisfaction as an adult. If theyare not aware of this, a sad employee’s manager and colleagues mightthink themselves responsible for the employee’s unhappiness.

Alternatively, despondency can be more of a direct consequence ofchanges in the workplace. This can occur because certain expectationsand beliefs held by the employee are not matched by reality. Typicallythis relates to the expectations someone has when joining an organizationor moving to a new job. Expectations are such that they can be generatedindependently of any promises made by the employer.

In 1960 Chris Argyris clarified this notion of expectations when talkingabout the psychological contract. The psychological contract (see alsoChapter 8) is based upon perceived obligations, and as such is a promis-sory contract. In contrast to formal or implied contracts, the psychological

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contract is inherently perceptual, with the possibility that one party’sunderstanding or expectations may not be shared by the other.

The concept of the psychological contract attracted much interestduring the 1980s as many organizations began to move towards perfor-mance-based systems of reward and shorter-term, transactional relation-ships with their employees. This shift away from job security and rewardsbased on length of service potentially presented problems for, say, thosewho had already worked in an organization for many years and perceivedtheir loyalty to it to be met by a breach of the anticipated rewards from a‘job for life’.

Underpinning a concept like the psychological contract is the factor oftrust, and in particular trust in one’s employer. Trust therefore plays amajor part in the subjective experience that is represented by a breach inthe psychological contract by an employer. As a study reported by SandraL Robinson (1996) showed:

the likelihood of psychological contract breach, and its negative impact, canbe offset if employees’ trust in their employer remains high. If restructuringand downsizing continue to be facts of organizational life, then the chal-lenge for managers is to learn how to navigate such changes in a way thatpreserves employees’ sense of trust. By effectively managing employees’trust, organizations may be able to avoid the negative ramifications ofpsychological contract breach.

Some of the elements that constitute changes in and breaches of the psy-chological contract reflect some of the broader social changes occurringin life, and these are clearly beyond the capacity of the organization tocontrol. As an example, the concept of the life/work balance is one thathas grown in importance in recent years. The extent to which this hap-pened over the period between 1992 and 2001 was reported by White(2001) in a study funded by the ESRC (Economic and Social ResearchCouncil). The study showed that whereas a majority of female employeeshad been completely or very satisfied with their working hours in 1992,by 2001 the proportion was less than one-third (29 per cent). In the sameperiod the change for their male counterparts was equally marked, withthe percentage dropping from 35 per cent to 20 per cent.

Clearly in spite of the vast range of causes of potential unhappiness,these need to monitored and tracked to ensure that they are dealt with.This includes situations when customers may currently be happy. An in-teresting scenario was posited by Greenway and Southgate (1985):that morale could be eroded unnecessarily when employees do notexperience the satisfaction warranted by a job well done. They were re-porting on their research among employees and customers of the TrusteeSavings Bank in the UK. They started out with the presumption of an


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ideal, whereby the level of service wanted by customers was actually thelevel that they received; and that employees and customers would sharethe same vision of what that level of service would be.

For the quantitative stage of their investigations the authors used atechnique known as SIMALTO (simultaneous multi-attribute-level trade-off), and one of their major findings was that employees consistently ratedtheir performance at a lower level than customers did. Although em-ployees were being asked to respond in this research according to howthey perceived customers’ requirements and satisfaction, it does stillhighlight a situation in which there is the potential for a mix of happycustomers and unhappy staff.

Although there are many reports of situations in which there is a strongcorrelation between the views of customers and employees as to whatconstitutes service quality, this study was neither the first nor the last todemonstrate that perceptions can vary between the two groups.

In their 1994 paper Bitner, Booms and Mohr suggested some explana-tions for this. They commented on the importance of roles and roleexpectations. In some sectors these are well defined, and hence they leadto common expectations by employees and customers. In addition, someencounters are repeated more frequently than others, reinforcing theknowledge of the ‘script’, or the structures that describe the way in whichrole behaviours occur. While sometimes sub-scripts (or the prescriptionsfor handling matters when something goes wrong) are not so well known,and this hinders a common appreciation of what constitutes good service,generally the more routine and frequent the occurrence (the authors citedthe example of being seated in a restaurant), the greater the likelihoodthat employees will share the same view as customers of what constitutesgood service.

The other theoretical construct that is relevant to this is attributiontheory, since different people can attribute different causes to the sameevent, not least when individuals either wish to take credit for any successor deny responsibility for anything that went wrong. Bitner, Booms andMohr (1994) noted that this is something that is more likely to colour thejudgement of an employee than a customer. This highlights the fact thatemployees can be more concerned with internal processes, while cus-tomers will be focused on the outcome (whether they get what they want).Viewing the issue in this way helps to explain why employees may havedifficulty in seeing matters from a customer’s perspective.

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HAPPY EMPLOYEES AND UNHAPPYCUSTOMERS

In response to his original article Harrington received many well-arguedresponses, which prompted him to develop his thoughts in a second ar-ticle early in 1999. As part of his own defence, he quoted the example ofa visit to a computer store, where an employee was engrossed in technicalconversation with a fellow ‘techie’. The conversation was prolonged,covering many topics not related to the purchase that was being made,and left the observer feeling a disgruntled (potential) customer. Yet herewas an employee who was probably in his dream job, spending all dayin an environment which left him extremely happy, and with hugejob satisfaction.

This example from the retail sector is one that many people can prob-ably recognize from their own empirical evidence of shop assistants whoare happy in their roles and in the company of like-minded colleagues,but who perhaps are not always alert to the possibility of delighting thestore’s customers. Examples can clearly be found from other sectors.Harrington also recalled his time as a development engineer at IBM,where he admits that the things he wanted to work on and the thingscustomers wanted from IBM were very different. His primary interestwas in design, and he wanted to work on something he could patent, noton things that IBM could sell.

Moving on from those situations in which the intrinsic job-interest toan employee may cut across notions of service that are deemed acceptableto customers, an all-too-frequent cause of difficulties is an ill-thought-through system for targeting and possibly rewarding employees. A clas-sic example of this is drawn from call centres, where the agents are paidaccording to the number of calls fielded. The superficial business logic iseasily understood: that is, it is driven by a desire to eliminate waitingtimes on the telephone for customers. However the law of unintendedconsequences takes over, as can happen, and the agents make sure thatthey keep the length of the calls to a minimum so they can move on to thenext one. Unfortunately, for many customers this means there is notenough time for their problems to be addressed, let alone solved, and itwill probably result in them having to make further calls until theyachieve a resolution.

HAPPY EMPLOYEES AND HAPPY CUSTOMERSThere are many examples available that seek to demonstrate this ‘happy’combination and IT is a fertile area. Where employees understand what


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matters to customers and use this intelligence to identify the problem,they can fix it and take the necessary action to prevent it from recurring.This significantly reduces the impact of IT failure on their clients’businesses.

In ‘Managing and measuring for value: the case of call centre perfor-mance’, the Cranfield School of Management highlighted some notableexamples of organizations adopting an approach that sought to capitalizeon such intelligence. First, the European airline bmi took this approach,and reduced queues at ticket offices, check-ins and boarding gates. Theairline’s IT director Richard Dawson is quoted as saying: ‘Over the lasttwo years calls have been reduced by 40 per cent and time to fix by 70 percent.’

Another instance comes from Fujitsu, the IT solutions provider, whichhad a self-imposed time limit on calls. When it got rid of this time limitstaff were in effect given permission to fully resolve customer queries.This had the effect of reducing the number of unnecessary calls by asmuch as 60 per cent, and increasing customer satisfaction. Moreover, staffturnover fell sharply, from 42 per cent to 8 per cent, as staff gained morejob satisfaction, while operating costs were reduced by 20 per cent.

Continuing with this theme, Joy LePree (MSI News-Line Weekly,21 April 2003) reported a case involving the Naval Air Depot at CherryPoint, North Carolina. The depot struggled to meet deadlines for gettingaircraft repaired and back in service. When the situation was analysed itwas found that the facility’s overall business philosophy of keeping a lidon costs was at the root of the problem. This was then changed so that thedepot’s most important business metric became throughput, or the num-ber of aircraft repaired and returned to service in a given time period.That number doubled in a year, clearly pleasing the depot’s customers.The employees and managers at the depot were also happy as they wereable to improve customer service without a significant impact on theirbudgets. Above all else this is another demonstration of how importantand interconnected the business strategy is to the happiness of employeesand customers.

No less a person than Jack Welch was said to rely heavily on employeesatisfaction data when he was running General Electric. In a 2001 speechbefore the National Association of Manufacturers, Don Wainwright, pres-ident of Wainwright Industries, winner of the Malcolm Baldridge Na-tional Quality Award, was reported by Infoquest as saying that ‘JackWelch uses only three indicators to run giant General Electric. He’ll tellyou that the most effective and only numbers he needs to know are, inorder of importance: employee satisfaction, customer satisfaction andcash flow.’

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Despite the anecdotal evidence, for many it remained unclear whetherthere was a causal link between employee and customer satisfaction. In1996 Ryan et al warned that there was ‘insufficient evidence for the pop-ular wisdom that employee attitudes cause customer satisfaction’. Theyacknowledged the commonsense argument, and that some research tes-tified to employee and customer attitudes influencing each other, butargued that this could be because one was reflective rather than predictiveof the other.

LOYALTY AND COMMITMENTAn overview of this research gives rise to the conclusion that it is notenough simply to have a happy workforce, desirable as that may be, sincetheir happiness may not necessarily be derived from anything that thecompany has done. Indeed it may not lead to any productive benefits forthe organization, if the employees are somehow cocooned in a state ofhappiness and divorced from the imperatives driving that organization.Someone whose abilities are underused because there is not enough workto do may be very happy in being paid to spend company time readingbooks and magazines, yet clearly this is an inefficient use of resources forthe organization, and with no discernible benefit to any stakeholders(with the possible exception of society as a whole, since there is one lessperson looking for employment).

Consequently commentators have looked for measures that go beyondsatisfaction, such as loyalty. This does have the virtue of implying a con-nection with the organization, since the assumption is that the loyalty isexhibited towards it. However, care needs to be exercised, since there isthe danger that loyalty will be confused with long service.

Service records are clearly vital pieces of information for an HR func-tion. At an individual level they demonstrate what has been achieved,and give guidance about suitable future opportunities, not least in theimportant area of succession planning. At an aggregate level, there is thepossibility that superficial judgements will be made about the desirabilityor otherwise of groups of employees remaining with the organization fora long (or short) time. If many people have been around a long time, itcould militate against the need for adaptability when changes have to bemade. If many people are new to the organization it could lead to a wasteof resources, if the mistakes of the past are recreated without the benefitof the experience of those who have been through it before.

A stronger measure than loyalty that has been postulated is commit-ment. Jamieson and Richards (1996) described the application of theconversion model, as developed by Dr Jan Hofmeyr, to employees.The model has been successfully deployed in research amongst


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customers, where it seeks to categorize them as entrenched, average,shallow or convertible according to their commitment to and involvementwith the brand under study.

As the authors point out, the model is particularly relevant to employ-ees, since it has been shown that switching between ‘brands’ can occurwhen satisfaction is high, but does not always occur when satisfaction islow. Yet where involvement is high, conversion is delayed; and where itis low, it happens easily. Apart from satisfaction, commitment is an amal-gam of involvement, inertia and interest (or lack of) in alternatives.

In their studies, Jamieson and Richards did find that long service doesnot necessarily denote commitment: those who have recently joined canbe more committed than those who have been there longer. They alsodemonstrated that there is typically more commitment amongst those insenior positions, an outcome that is often in evidence from employeeopinion surveys.

The authors went on to record those factors that characterized aworkforce that is less committed: when they feel their contribution is notvalued or appreciated; when formal communication is supplanted by thegrapevine; and when they perceive the organization to be poorlymanaged or led.

The use of an approach like this has the additional merit of being ableto contrast, and perhaps subsequently align, the perspective of customerswith that of employees.

EMPLOYEE ENGAGEMENTA variation on the theme of commitment is that of engagement. This canbe characterized in terms of the understanding of and delivery againstthe business strategy. It therefore embraces how the organizationpresents itself to its customers and how it relates to its employees, and assuch carries implications for the measurement of ways in which employ-ees make a difference to the success of the organization.

In their report entitled ‘The drivers of employee engagement’,Robinson, Perryman and Hayday (2004) set out six characteristics of anengaged employee. These characteristics include having belief in the or-ganization and a desire to work to make things better. In addition it isabout having an understanding of the business context and the ‘biggerpicture’ as well as keeping up to date with developments in the field.Moreover engaged employees should demonstrate a respect for, and adesire to help, colleagues along with a willingness to ‘go the extra mile’.

There are similarities between some of these characteristics and thepersonal qualities and behaviours that contribute towards organizationalcitizenship, discussed later in this chapter. However, as the authors go on

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to point out, engagement is more of a two-way process. Indeed they de-fine it as follows:

A positive attitude held by the employee towards the organization and itsvalues. An engaged employee is aware of business context, and works withcolleagues to improve performance within the job for the benefit of the or-ganization. The organization must work to develop and nurture engage-ment, which requires a two-way relationship between employer andemployee.

In their studies the authors found, from analyses of employees in theNational Health Service, that there was a correlation between engage-ment levels and some other factors such as age and length of service.Typically, those who were older or had been with an organization longerwere likely to be less engaged, with the exception being those aged over60, who were more engaged than anyone else. Having an accident or aninjury at work or experiencing harassment (particularly if the manager isthe source of the harassment) was also found to have a negative impacton engagement.

In contrast those who have a personal development plan, and whohave received a formal performance appraisal within the past year, arelikely to have significantly higher engagement levels than those who havenot. Generally those in managerial or professional roles are also morelikely to be engaged than support staff.

From this latter point there is a connection to what is driving engage-ment. The authors found that the paramount driver is a sense of beingvalued and involved. This in turn can be assisted by being given oppor-tunities to contribute ideas and make decisions, as well as taking aninterest in people as individuals and helping them develop their careers.These actions clearly place a premium on the participation of line man-agers in engaging employees, as it is the clearest way in which theorganization can recognize the contribution and qualities of employees.

Research by Towers Perrin, reported by personneltoday.com inDecember 2004, put a slightly different slant on engagement. In additionto the crucial nature of showing interest in the well-being of employeesand helping them with their development, the research concluded thatthe top five most important elements also included the need for employ-ees to have challenging work to do and the appropriate authority to do agood job. In addition it was seen as being essential that senior managerslead by example.

This research also analysed the relationship between the engagementlevels at companies and their impact on financial indicators. The conclu-sion was that companies with engagement levels above their industrysector’s average outperform their peer group, on aggregate, by 17 per cent


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in terms of operating margin. However the report stops short of assertingdirect causality between engagement and profitability, given the verylarge number of parameters involved.

Engagement is in all probability likely to vary with and be affected bydifferent factors in different organizations. Hence, given the importanceof measurement in this area, it is extremely important that any efforts togauge and monitor engagement are undertaken on a bespoke basis, tak-ing into account the specifics of the organization concerned.

The linkages between employee effectiveness, customer satisfactionand, ultimately, shareholder returns have become known as theemployee–customer profit chain.

EMPLOYEE–CUSTOMER PROFIT CHAINPerhaps the most quoted example of a study that examined this relation-ship between employees and customers is the one concerned with Searsand written by Rucci, Kirn and Quinn in the Harvard Business Review(1998). The report followed a major turnaround in the fortunes of thecompany after a decade of decline. One of the principal components inthis process was the creation of a model which incorporated the softermeasures of satisfaction amongst employees and customers alongsideeasier-to-gather data such as revenues and profits. Although the authorsacknowledge that many organizations may not have the will to collect allof the data necessary to chart the linkages from employee behaviourthrough customer satisfaction and on to profitability, they also make thepoint that doing this on its own is not sufficient. What is also needed isthe willingness of managers to accept and buy in to the modelling, andthe deployment of it in such a way that the employees themselves seehow it works and how their own efforts impact on the success of thebusiness.

Indeed the development of the model was in itself a demonstration ofhow the participation of managers and employees helps with the buy-inand subsequent usage. Task forces were formed in an effort to identifyways of achieving (and measuring) progress towards the goal of world-class status. Research surveys that had generated data from customersand staff were studied; focus groups were conducted amongst a largecross-section of employees as well as customers.

The early direction for where Sears needed to head was encapsulatedin a statement of it being a ‘compelling place to work, to shop and toinvest’. The hard work that then had to be undertaken was the establish-ment of the relationships (using causal pathway modelling) between thevarious parameters that linked employee attitudes with those of cus-tomers, the resultant purchasing behaviours and ultimately the revenue

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and income growth that would reward investors. And once this wasachieved the data had to be collected (across time as well as 800 stores) toverify these relationships.

The areas that were shown to have an impact on employee behaviourand hence customer satisfaction were grouped into two categories. Thefirst was concerned with attitudes towards the job (liking the kind ofwork, obtaining a sense of accomplishment, being proud to say who theywork for, the impact of their workload, the physical working conditionsand treatment by supervisors). The other category was about the com-pany (feeling good about the future, whether it would be able to changeand compete, understanding of the business strategy and the connectionbetween their work and the strategic objectives).

The effort taken in developing the model was rewarded by an abilityto highlight how effort in one area would lead to results in another. Oneexample quoted in the report is ‘A 5 point improvement in employeeattitudes will drive a 1.3 point improvement in customer satisfaction,which in turn will drive a 0.5 per cent improvement in revenue growth’.

Once the model had been tested, the challenge then was to take it outto the workforce as part of an education process which also coveredbroader territory, since it was discovered that there were massive mis-conceptions of things like the amount of profit made per dollar of revenuecollected (in reality just 2 per cent against a median expectation of 45).The task ahead clearly transcended communication, and hence requireda high degree of involvement, which led to the decision to conduct a cas-caded series of gatherings (‘town hall meetings’) so that everyone couldparticipate. The principal exercise in which everyone was expected toparticipate involved the use of ‘learning maps’ (pictures of, say, a townor store which led participants through a business process). In the processeveryone was encouraged to put forward suggestions for improved per-formance at a local level, based on the information supplied to them. Atthe conclusion of the report, the authors were able to point to increasedlevels of employee and customer satisfaction at a time when the retailsector in general was less favourably viewed, and to the impact on rev-enues and market capitalization.

Another example of a successful employee–customer profit chaintaken from North America comes from the Canadian Imperial Bank ofCommerce (CIBC). In a paper ‘Does customer satisfaction pay?’ Hilldiscusses how the bank, which has 1,300 branches, uses an employeesurvey to produce a composite measure of ‘employee commitment’ atbranch level. It also uses customer surveys to establish a measure of cus-tomer loyalty by branch. Both surveys are compared with branch prof-itability. The bank has learnt that a 5 per cent increase in employeecommitment results in a 2 per cent gain in customer loyalty, which in turn


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drives a 2 per cent gain in profit. For CIBC this was worth $72 million inone year.

Hill also cites other companies that have built similar models, includ-ing Dow Chemicals, for whom a 1 per cent increase in loyalty generatesa 1.2 per cent increase in account share, while IBM demonstrated that a1 per cent increase in its Customer Satisfaction Index was worth an extra$500 million in sales over the following five years.

CASE STUDY

A recent example from the UK concerned the Nationwide BuildingSociety which had analysed 11 years’ worth of data from em-ployee surveys along with two years’ data from surveys amongstcustomers, totalling 1.5 million data records. The results overallshowed that the longer employees had worked for the organiza-tion, the better the business performance. This performance wasdriven by the following factors: having pride in working for a suc-cessful organization; perceived fairness of the pay system; trust insenior management; the opportunity to develop and use skills; andrecognition of good work.

In examining the analysis it was recognized that employee sat-isfaction of itself did not necessarily result in improved perfor-mance: the issue was rather how that was translated into employeeand customer loyalty and commitment. As a consequence actionswere taken specifically in respect of pay scales and the engineer-ing of a more mature workforce, such that the average age of the16,000 employees increased by at least one year.

The fruits of these efforts have been demonstrated in the in-creased size and profitability of the business (the addition of56,000 customers, improved customer satisfaction ratings, thegrowth of the personal loan book and sales of general insurance).

Source: Doug Morrison, ‘Happiness is the key to biggerprofit’, Sunday Telegraph, 6 March 2005.

Further evidence comes from a previous study from the UK, carriedout by researchers employed by the Institute of Work Psychology at theUniversity of Sheffield (Patterson et al, 1997). They also found a strongcorrelation between employee satisfaction, employee organizationalcommitment and overall business performance.

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CUSTOMER RELATIONSHIPSEarlier it was noted that financial services is one of the sectors where thereis empirical evidence of the importance to customers of the relationshipthey enjoy with employees. Customers who appreciate the help and sup-port given by a manager or adviser will continue to deal with thatindividual even if he or she is moved to another outlet or region. Theirattachment to the brand of bank is not so much through the organizationbut through the representatives of it. Indeed, even without this strengthof association, it is still common for customers to exhibit greater favourtowards the local branch and those employees who work there than tothe organization as a whole.

This identification with the local brand presence, and particularly theassociation with the employees of the organization, is something that wasexamined by Reynolds and Beatty (1999) with respect to retail clothing.Their study covered a range of upmarket department and specialty storesacross the United States. They noted the inter-relationship of the socialand functional benefits (time saving, convenience, advice, better deci-sions) of knowing the salesperson.

Knowing the salesperson leads to greater satisfaction with that indi-vidual and then with the company, laying the foundation for greaterloyalty to the salesperson and the company and ultimately a greater shareof purchasing of goods from that company. Interestingly while theyfound that satisfaction with the salesperson led to customers recom-mending that person to others, there was not necessarily the equivalentword-of-mouth benefit to the company. As Czepiel had noted in 1990,loyalty such as that exhibited to salespeople is built on trust, attachmentand commitment, all of which values are more deeply exhibited in per-sonal relationships.

It is generally accepted that loyal customers are more profitable, if forno other reason than the costs of acquiring new customers or the greatereffort needed to persuade less loyal ones seriously impact upon prof-itability. Meanwhile Deming noted in Out of the Crisis (1986) that profitin business comes from repeat customers and personal recommendation.This is why some organizations do things like making questionnairesavailable at the point of sale in order to capture spontaneous feedbackfrom customers about employees who have been particularly helpful.

However, when analysing the relationships customers enjoy with anorganization it has to be remembered that not all customers are lookingfor the same sort of relationship. Indeed, the same customer can be look-ing for variations in the nature and intensity of that relationship atdifferent points in time, and in many instances may not be seeking a re-lationship at all, but merely wishing to carry out a single transaction.


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While the organization can seek to manage this relationship it cannot ofcourse control it as, even allowing for the wishes of the customer, it canbe influenced by factors that are literally out of its control such as theactions of competitors or other developments in that marketplace.

Dr John Gattorna, a recognized authority on supply chain design, pos-tulated in a speech in 2003 that key dimensions in a relationship arewhether it is loose or tight, and the extent to which demand for the goodsor services in question is predictable. It also has to be borne in mind whatit is that customers are actually buying. As Heskett, Sasser andSchlesinger said in The Value Profit Chain (1997), ‘Customers don’t buyquarter-inch drills; they buy quarter-inch holes.’ So the key requirementis to find out what the priorities of the customers are, not just to make andmaintain a better drill.

EMPLOYEES AS ‘REAL’ CUSTOMERSOne of the more obvious ways in which employees can be expected totruly empathize with customers is when they are themselves a customerof the organization that employs them. Sometimes this is simply not pos-sible. By definition someone employed as a consultant or adviser in anemployment bureau or social security office would not be in the positionof seeking the services available to those who are currently out of work.

However, even where employees are using the products or services oftheir employer they are frequently doing so on a preferential basis, whichlimits the scope for them to understand the issues facing customers.Somebody working for a car manufacturer may be able to purchase amodel at significantly less cost, and have access to better servicing andrepair facilities, than if he or she was not an employee. Those working ina bank or other retail outlet are unlikely to have to queue up with othercustomers to pay in cheques or pay for their weekly purchase of groceries.And since queuing can be a major source of irritation for customers, it isan aspect of life that employees will not so readily appreciate.

In order to help employees with an objective representation of howcustomers are treated by the organization, there are research methodolo-gies that can usefully supplement the more traditional reliance on inter-views with customers recalling their experiences. A researcher who isthere to record and subsequently analyse the transaction may accompanya customer. Alternatively, using an approach known as mystery shop-ping, a researcher will conduct a transaction personally, having beenspecifically briefed to record the way in which it was handled.

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INTERNAL ‘QUASI’ CUSTOMERSWhen employees are not users of the products and services of their em-ployer, they are still very likely to be the ‘internal’ customer of someoneelse in that organization. The salesperson or the adviser will be the cus-tomer of the manufacturing arm, whether the employing organization isproducing consumer goods or financial services. The strategists will bethe customers of those gathering data on markets and performance. Thecall centre and virtually everybody else in the organization is likely to bea customer of the IT function.

In the latter years of the 20th century, an awareness of the importanceof service within the organization led to the creation of what seemed likean industry that was sadly introverted and disproportionate to the effectthat it had on the external customer. Farner, Luthans and Sommer (2001)commented on the quantity of descriptive, anecdotal literature on internalservice, yet they had found little empirical assessment of this ‘hot topic’in total quality.

They remarked that although the concept of viewing fellow workersas customers made intuitive sense, there was still a debate among bothacademics and practitioners as to the real value of internal customer ser-vice to the service quality to external customers. They therefore took theexample of a large food and grocery wholesaler in order to make an em-pirical examination of the impact that internal customer service has onexternal customer service. Unfortunately their conclusion was that inter-nal customer service seems to have a relationship with external customerservice that is complex and at best mixed.

Meanwhile, considerable effort has been devoted to creating and mon-itoring service level agreements between internal functions, and evenprocesses for the transfer of ‘funds’ between them to replicate the pur-chase of services. It therefore became something of an industry in its ownright. While there is a compelling argument that every employee is a linkin the chain by which the organization ultimately meets the needs of itscustomer, the extent to which processes are built up to sustain this argu-ment is more debatable. At a minimum there is the danger that employeesare asked for their views in research for their ‘supplier’ colleagues toofrequently and they become progressively less inclined to take part in anyfurther research.

In retrospect and with some organizations in particular, this may havebeen a necessary stage in the journey of the organization to becomingcustomer-oriented. It may well have been helpful to those who subscribeto the philosophy that ‘it can’t be managed if it can’t be measured’. How-ever, once the profile of customer orientation has been raised in this way


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by making it a component of everyday life, there will be less need forreinforcement through such processes.

Indeed, there is clearly much more to be considered in the context ofrelationships between employees than simply seeing one to be the cus-tomer of another. These broader considerations are best illustrated byreference to the concept of organizational citizenship behaviour.

ORGANIZATIONAL CITIZENSHIP BEHAVIOURIn 1988 Organ defined organizational citizenship behaviour (OCB) as ‘in-dividual behaviour that is discretionary, not directly or explicitly recog-nized by the formal reward system, and that in aggregate promotes theeffective functioning of the organization’. While his is not the only defi-nition of OCB, Organ’s statement of the five component behaviours thatrepresent organizational citizenship is widely accepted. Firstly there isaltruism, which is defined in this context as helping fellow employeeswith tasks or problems relevant to the work of that organization. Secondthere is conscientiousness, which involves discretionary behaviour goingwell beyond minimum requirements of the role. The third behaviour,civic virtue, is an indication of a willingness to participate responsibly inthe life of the organization. Then comes sportsmanship, defined as anybehaviour demonstrating tolerance of less than ideal circumstances with-out complaining. Finally there is courtesy, which includes efforts toprevent work-related problems with others.

The principal way in which such behaviours can influence organiza-tional performance arises from the way in which they help people to worktogether, whether within or across groups. In turn this also frees up man-agement and supervision time, improving effectiveness outside of theteam. OCB can also influence customer satisfaction. For example, consci-entious employees act beyond customer expectations, and those exhibit-ing civic virtue make suggestions to improve quality and customersatisfaction. In addition, sportsmanship and courtesy can create a positiveclimate among employees that spills over to customers.

While there is less evidence of a quantifiable impact on customers andtheir own behaviours (in part reflecting the construction of citizenshipbehaviours from an internal perspective) a study by Koys (2001) demon-strated that positive employee satisfaction, citizenship and retention inyear one influenced customer satisfaction and profitability in year two.The strongest findings were that organizational citizenship behaviourinfluences profitability and employee satisfaction influences customersatisfaction.

In some quarters these behaviours have been further characterized interms of a ‘thinking performer’: a person who is prepared to do more than

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is required of him or her by the job description. It is also possible toenvisage the individual behaviours in a broader context, most notably inthe case of civic virtue.

EMPLOYEES IN THE WIDER WORLDBeyond the immediate role and function of an employee, individualshave the potential to represent their employer and be an ambassadorfor the organization on a wider stage, thereby influencing the viewsof customers and potential customers alike. In recent years the impor-tance of the corporate social responsibility (CSR) of organizations hasreceived considerable support. In the UK the government has its ownwebsite devoted to the topic: http://www.societyandbusiness.gov.uk/whatiscsr.shtml

The discussion around CSR has tended to concentrate on issues relatedto the environment and sustainable development goals. However, thesubject is clearly much broader than this, as it is also about how businesstakes account of the economic and social impacts of the way it operates.In many ways it is the corporate equivalent of OCB, since it encompassesthe voluntary actions taken over and above compliance with minimumlegal requirements, as the organization addresses both its own competi-tive interests and the interests of wider society.

It therefore encompasses how the organization treats those who workfor it, as well as how those employed by it represent it in a wider contextoutside the business premises. The former, concerned with what happensin the workplace, will see the organization judged on such facets as equal-ity of opportunity, family-friendly policies, and reasonable remunerationfor work undertaken.

In addition to these manifestations of the way the organization treatsits employees, it will be assessed by the community it operates in by virtueof how it and its employees behave. This is sometimes described as alicence to operate, since it reflects the willingness of the community toaccept and interact with that organization locally. The organization cansupport local communities through the provision of resources and/or thetime and involvement of its employees. Although many employees willwish to be involved in activities that benefit the wider community, not allof them will view these activities as being done on behalf of their em-ployer. Instead it may be something that is a personal interest to bepursued quite separately from their employment.

In the same way that an organization will seek to match the contribu-tion of its employees to the expectations of its customers, it clearly makessense to identify where there would be an optimal match between theexpectations of the community and those activities with which employees


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http://www.societyandbusiness.gov.uk

http://www.societyandbusiness.gov.uk

are willing to be involved. Research can play its part in this identificationprocess. In addition, the measurement of such involvements allows thoseorganizations that wish to do so to benchmark their efforts against others.

The body known as Business in the Community has a corporate re-sponsibility index (to be found on the bitc.org.uk website). This coversthe management of four key areas: community, environment, market-place and workplace. It can assist organizations by identifying gaps inperformance and establishing where improvements can be made. The in-dex also facilitates the demonstration to stakeholders that business istaking the lead in promoting awareness on public reporting, with theattendant benefits to trust in business and transparency in businessperformance.

CONCLUSIONSNot everyone reports a causal link between actions designed to boost thehappiness or satisfaction of employees and improvement in customersatisfaction. There are plenty of examples reporting situations of ‘mutualhappiness’, with both employees and customers being the beneficiariesof a particular business decision.

What is clear is that policies need to be designed to provide an overalldirection, and systems need to be put in place to ensure that the motiva-tion of employees supports actions that will, and will be seen to, benefitcustomers and the community at large.

A central component of any policy will be communication, given thebenefits of engaging the support of employees for the aims of the orga-nization. In addition such intentions are also crucially dependent on theeffectiveness of the management team, given the need to recognize thecontribution of employees as part of the engagement process.

At the very least it is important to take regular readings of employeeattitudes in order to gauge how they may be shifting and responding toevents. Such studies can then be tailored to link in with complementarystudies of customer satisfaction and expectations. These studies shouldbe undertaken in a manner that reflects the particular circumstances ofthe organization and the influences upon it. While it is attractive to applya model established in another area, this can be fraught with danger whenit ignores relevant factors specific to the organization.

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Employees,shareholders andcapital

3

INTRODUCTION

It is therefore worthwhile considering the inter-relationships betweenemployees and shareholders. Although few employees other than thosein the investor relations function have direct contact with shareholders,in contrast to the employee–customer linkages which are often verydirect, it is crucial that the interests of employees, customers and share-holders are balanced so as to avoid a situation where one group suffersat the expense of the others. As Reichheld pointed out in his seminal workThe Loyalty Effect (1996), business is not a zero-sum game where investorscan only make more money at the expense of customers and employees,and vice versa. Rather he proposes the concept of virtuous profit, whichis the result of creating value, sharing it, and building the assets of thebusiness.

In many instances an individual can be an employee, customer andshareholder of the same organization, but this chapter concentrates on

The previous chapter considered the inter-relationships between em-ployees and customers, and specifically the notion of the employee–customer profit chain, where the ultimate beneficiaries include theshareholders. In addition, employees are likely to be influenced by com-munications aimed at other audiences such as shareholders, notably inthe case of annual reviews and the annual report and accounts.

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the links between employees and shareholders. It examines the benefitsof being, as well as the encouragement to become, a shareholder.

In addition, the notion of people as capital is explored. For many yearslabour and capital were considered quite separately in any discussion ofeconomic theory related to the factors of production. Yet increasingly thepremium attached to knowledge and innovation has led to terms such asintellectual capital and human capital featuring in business, suggestingthat the distinction has blurred. Indeed, increasing efforts have beenmade to place a financial valuation on the contribution made by employ-ees, with such valuations being informed by research studies concernedwith the attitudes and behaviours of employees. Moreover, such devel-opments have specifically led in the UK to demands for organizations toinclude a commentary on human capital in their operating and financialreviews.

HAPPY EMPLOYEES AND HAPPYSHAREHOLDERS

It is not the intention to go to the full extent of considering the permuta-tions of happy and unhappy employees and shareholders, as was donefor customers in the previous chapter. Indeed, formal research conductedamong shareholders is still relatively uncommon. Nevertheless, it isstill worth examining the evidence that supports a positive correlationbetween the happiness of the two groups, with the happiness of share-holders or stockholders taken to be indicated by the increased valuationof a company’s stocks and shares.

In a variation of the analysis performed by Harrington (1998, 1999),Robert Levering of the Frank Russell Company presented some results inApril 2004 which showed the superior investment performance of Fortunemagazine’s ‘100 Best Companies to Work for in America’. Between 1997and 2003, the stock of the companies identified in this list outperformedthe Standard and Poor’s 500 by over 430 per cent.

The winningworkplaces.org website on which this study appears alsohighlights a worldwide study by Watson Wyatt in 2001, which showedthe value of employee-friendly companies’ stock increased by 64 per centover five years compared with an increase of only 21 per cent for stockprices of companies with the least employee-friendly workplaces. Previ-ously Heskett, Sasser and Schlesinger had shown, in their 1997 analysisover a 10-year period, that the stock price of companies that madesubstantial investments in employee loyalty and satisfaction increasedby over 147 per cent, almost double the increase in stock prices of theirnearest competitor.

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Perhaps one of the companies most associated with the linkages be-tween employees and shareholders is Southwest Airlines. Gittell’s study(published in 2003 following eight years of research) found that theairline, known for its progressive and innovative people practices, hadthe highest profitability of any US carrier, had a total market value thatexceeded that of all other US airlines combined, and had the highestemployee productivity of any major US carrier.

The potential for the most direct link between employees and share-holders is created by the granting of shares to employees. As Baker andTilly have found in their studies of the alternative investment market(AIM) in the UK, companies that wish to expand through a flotation areable to motivate their employees by allowing them to become sharehold-ers. In the case of established companies there are several routes by whichemployees can become shareholders.

Detractors of share ownership by employees may point to companiessuch as Enron, where employees were strongly encouraged to invest largeamounts of their savings in company stock, ultimately to a disastrouseffect on their prosperity when the shares collapsed. In this instance therewas also the knock-on effect of seeing 401K retirement plans take a hit, asEnron had matched individual contributions to them using companystock.

However, this example says more about the leadership and gover-nance of the organization than anything inherently wrong with encour-aging employees to share in the successes (and failures) of the company.Open and honest communication about the way in which the businesswas operating and what the future held for it would have enabled em-ployees to make better informed decisions about how and where theirsavings should be invested.

COMPLETE CONVERGENCEIt would be very rare for the shares in a publicly quoted company to beheld exclusively by the employees, and it would be even rarer for theshares to be distributed across all the employees. The complete conver-gence of the interests of owners and employees is more likely to be foundin a private company. Yet in many ways this can be seen to also representthe convergence of quite different ideologies, as at the extreme it becomesindistinguishable from the notion of a cooperative movement.

Cooperatives flourished in Victorian times, taking many forms, andsome survive today. Some protect the interests of members or contribu-tors, such as building societies and other mutual organizations in thefinancial sector. Others are formed to provide benefits to consumers, suchas the Co-operative Wholesale Society and Co-operative Retail Services.

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The idea with these was that the benefit accrued to members through thepayment of a dividend proportionate to the amount spent by a member.In practice the distribution tends to be limited by the need to retainreserves to support the development of the business.

A workers’ or producers’ cooperative is run for the benefit of thosewho work in it. An excellent example comes from Spain, where theMondragon Corporacion Cooperativa (MCC) was set up in 1956 by fiveyoung engineers to make paraffin cooking stoves. It has since grown tobe one of the largest companies in Spain with over 70,000 members, andalthough not all of them are now member-owners, the main focus of theMCC still remains the creation of owner-employee jobs. Statistics fromtheir website show the Mondragon cooperatives to be twice as profitableas the average corporation in Spain, with employee productivity sur-passing any other Spanish organization. The organization is focused onsocial success, involvement of the people and industrial democracy.

Interestingly the idea of a workers’ cooperative is firmly identifiedwith the political left, while the support for wider share ownership hastended to be associated with the political right. Yet ultimately where shareownership is primarily in the hands of employees the net effect is thesame, with the employees exercising control over the organization.

The only potential difference between a workers’ cooperative and acompany owned by its employees through shares is that a cooperative islikely to be run on a basis of ‘one member one vote’, whereas voting rightsdetermined by shareholdings will take account of the relative size of thoseshareholdings. Being owned by the employees is not the whole story,since the governance of any such organization may preclude the full par-ticipation of employees. This is why the success of John Lewis (see thebox) is testimony to the constitution that established the partnership over75 years ago.

A partnership is another form of organization that can be said to haveits employees as the owners (provided that ownership is not concentratedin the hands of a very small minority of the individuals working in it).The John Lewis Partnership, the retailer and the UK’s largest unquotedcompany, is perhaps the largest such organization and warrants closerconsideration.

CASE STUDY

The John Lewis Partnership is a £5 billion business with over60,000 partners working in 26 department stores and 163 foodshops. The first store was opened in London’s Oxford Streetin 1864 by the eponymous owner. The trust establishing thepartnership was created by John Lewis’s elder son Spedan Lewis

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once he had assumed control of the stores upon his father’s death.Spedan Lewis had already shown himself to be an innovator in-ternally, with the establishment of a committee specifically con-cerned with communications for staff. Externally he had positionedthe organization strongly to the benefit of customers under theprinciple of ‘never knowingly undersold’.

Since the establishment of the partnership in 1929 the profitshave always been available for distribution amongst the partners.The ultimate purpose of the partnership is stated in its constitutionas being the happiness of all its members, through their worthwhileand satisfying employment in a successful business. Since the part-nership is owned in trust for its members, they share the respon-sibilities of ownership as well as its rewards: profit, knowledge andpower. The monetary rewards of ownership are paid in the formof profit sharing, and in 2005 this amounted to 14 per cent ofpartners’ pay. The total amount distributed was an impressive£106 million, with a further £80 million being set aside for thenon-contributory pension scheme, while £70 million was retainedfor reinvestment in the business.

As founder of the partnership, through divesting himself of own-ership, Spedan Lewis wanted to instil in partners an understandingthat any benefits for them would depend entirely on the quality ofservice they delivered to the customers and the returns they werethus able to generate. He was very conscious that previous worker-cooperatives had tended to fail through losing sight of such com-mercial imperatives. To this day the partnership has continued todemonstrate impressive growth combined with an excellent repu-tation for service which is underpinned by the principle of being‘never knowingly undersold’. This principle is realized throughdedicated teams in each shop charged with, and rewarded for,identifying lower prices in the local area.

The constitution provides partners with an involvement in themanagement of the organization through the mechanisms of apartnership board and the partnership council, which holds thechairman to account. As part of the commitment to open commu-nication, partners are guaranteed anonymity when writing to thegroup’s national or local magazines. This ensures that they candraw matters to the attention of the chairman and the other mem-bers of the management team, who in turn are required to respondto any letters addressed to them with complete honesty.

Source: John Lewis (2005).


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WORKS COUNCILSNot too far removed from a workers’ cooperative, one way in which em-ployees participate in the governance of their employer is through aworks council. This can be defined as an institutionalized body for rep-resentative communication between an employer and employees in asingle workplace.

There has been a long history of works councils, particularly in Europe,where they were given greater prominence with the passing of the Euro-pean Works Council (EWC) Directive. In the UK this directive wasimplemented in early 2000 through the Transnational Information andConsultation of Employee Regulations 1999. This legislation comple-ments the EWC Directive by effectively catering for works councils thatoperate at a national level.

The EWC Directive applies to all companies located in more than oneEU Member State and with at least 1,000 employees in total. There ishowever no obligation for companies to establish an EWC unless eithercompany management takes the initiative to do so, or employees (or theirrepresentatives) make a request. If it is deemed that a council is required,a negotiating body called the ‘special negotiating body’ (SNB) must firstbe established. The SNB consists of representatives of all the employeesin the Member States in which the undertaking has operations, and it isthe SNB’s responsibility to negotiate an agreement for an EWC with themanagement of the company.

As with the Information and Consultation Directive that followed,there are provisions for much of the detail, including the composition ofthe EWC in terms of the number of members and so on; the functions andprocedure for information and consultation; the venue, frequency andduration of EWC meetings; the financial and material resources to be al-located to the EWC; and the duration of the agreement and the procedure.

The expected subject matter in any discussions relates to those issuesthat apply across the national boundaries in which the company operates.An Annex to the Directive lists those topics on which the EWC has theright to be informed and consulted (for example the economic and finan-cial situation of the business, its likely development, probable employ-ment trends, the introduction of new working methods, and substantialorganizational changes).

In practice few if any EWCs have been set up in the UK under thestatutory model. However it is understood that the provisions of manyagreements follow the statutory model quite closely. According to ‘TheUK experience of European Works Councils’, a section of a report pro-duced by the Department for Trade and Industry (DTI, 2003), a synthesisof the themes from various studies showed that:

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Some companies have found them to be of value, even if management didhave some initial doubts about the resource implications at the time theywere established. Particular benefits identified in the research include bettercross-business co-ordination among management teams and a betterthought out corporate strategy. Less positive aspects include the increasedbureaucracy involved in setting up and running an EWC and sometimesunfulfilled employee expectations about what an EWC might achieve.

ENCOURAGING EMPLOYEES TO BECOMESHAREHOLDERS

The number of companies that are completely owned by their employeesis fairly small, but for many the logic of encouraging employees to cementtheir involvement with the organization, sharing in the rewards of suc-cess, is compelling. It is also an aspiration that is supported by govern-ments in many Western democracies. This section therefore considersways in which this is encouraged among those organizations with sharecapital to distribute.

One of the consequences of generating interest in share ownership andhence the share price is the evidence of a company’s share price becomingmore visibly on display, for instance on intranets, corporate websites andin reception areas of company offices. Indirectly therefore it becomes ameans by which employees are encouraged to take an interest in howoutsiders view the organization, and it should result in them looking atthe broader picture rather than being solely internally focused.

That said, such an interest in and awareness of the external communi-cation flows (both from and concerning the organization) makes it im-perative that the messages going out are consistent with those sent to theemployees directly. Moreover, it is not enough to communicate consis-tently: behaviour has to be consistent with the messages as well. Oneexample of where this has to be handled very carefully is cost cutting.While messages about the control of costs will typically be well receivedby the investing publics, it will inevitably raise concerns among employ-ees about job security. So it is important to resist the temptation to stressthe benefits to one audience which will disappoint another, in those sit-uations where there is little overlap between the two.

In the same way that the previous chapter demonstrated that the effortsof employees need to be directed towards satisfying customers and notjust making employees happy, so it is with shareholders. Any scheme thatseeks to motivate employees through the use of share capital clearly needsto set objectives that are consistent with the broader plans for the business,and be compatible with the ethos and culture of it.


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Another important aspect is that encouraging employees to becomeshareholders introduces the need for a continuous programme of com-munications. Not all employees will be familiar with the ways of the stockmarket and so they may not always understand why the share price canfall as well as rise. Without some reassuring commentary or explanationas events unfold, many employees could be left uncertain about the ben-efits of shareholding, and in the worst case it could result in the schemehaving the opposite effect of the motivation intended.

Share plansIn the UK there have been various initiatives over the years to supportthe aim of wider share ownership amongst employees. At any one timethere are likely to be different schemes in operation with varying criteria.Some must be open to all employees and offer them tax breaks (poten-tially free of income and capital gains tax as well as national insurancecontributions) if they take advantage of the scheme. The awarding of freeshares may be linked to company, team or individual performance, andwhere the shares are held in trust for the employee the plans can assistwith staff retention, as early leavers are likely to have to forfeit any sharesgiven to them as employees.

Alternatively employees may be able to purchase shares in the com-pany they work for through the granting of rights (known as shareoptions) to buy a certain number of shares at a fixed price at a particulartime in the future. Such schemes may be open to all employees or theremay be plans aimed at motivating a specific group.

Given the culture of owning stocks and shares in the United States, itis not surprising that there have long been schemes with tax breaks (or‘qualified’ in US tax terminology) to encourage participation in the com-pany’s success. As with the UK these schemes include variations on thethemes of granting options to employees and giving them the right topurchase company stock using their own resources.

In addition things can be taken a stage further as some schemes involveretirement plans that allow the company to fund purchases of companystock on behalf of the employee. This connection with retirement planswas deemed to be extremely important by a study from Rutgers Univer-sity (Kruse and Blasi, 2000). Douglas Kruse and Joseph Blasi found notonly that companies with such plans increase sales, employment, andsales/employee by about 2.3 to 2.4 per cent per year over what wouldhave been expected from those without them, but in addition they weremore likely to be still in business several years later.

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CASE STUDIES

Australia also has a number of alternative schemes, and a goodexample of their effectiveness comes from the Workplace websitecreated by the Australian government. Two case studies are high-lighted. The first deals with CEA, an electronics design companywith approaching 300 employees operating out of Canberra,Adelaide, Melbourne and San Diego.

Having first introduced a share ownership plan back in 1998,CEA subsequently introduced an employee share option schemewhereby the number of options that were offered to employees wasdependent on length of service, seniority, contribution to companyperformance and the position held in the company. One of thechallenges faced by CEA was the complexity associated with thetax system, which required professional advice on the best way toset up their plan.

In addition, CEA faced the task of communicating the opportu-nities to employees. There will always be a certain number of staffwho do not wish to be involved in an employee share ownershipplan, even though it contains minimal risk for them. One reason isthe perception of the plans as being complicated. Resolving theseissues required the provision of as much information to employeesabout the plan as possible, as well as access to independent fi-nancial advisers. In the event the plan was taken up by 82 per centof employees.

The company clearly believes that their employee share own-ership plans have had, and continue to have, a significant andpositive impact on the business throughout a period of stronggrowth. The evidence for this is one of the highest employee re-tention rates in Australian business and an excellent productivityrecord, even when compared to the highly competitive industry inwhich CEA operates. CEA uses employee share ownership to pro-vide an atmosphere within the company where employees feelvalued and are interested in the performance of the organization.

As far as the employees are concerned, they benefit from anincrease in the satisfaction they receive from their job as well asan improvement in their personal financial situation. They like theidea of being able to invest in a company where they are able toinfluence the returns they receive. One of the most interesting ob-servations of an employee was this:

When the company first began I really felt like I was contributingto something greater than myself. Then, as the company grew and


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my personal influence seemed to lessen, I found the employee shareownership plan supported my feeling of involvement and the worthof my work to the company as a whole.

The same employee also mentioned that employee share owner-ship at CEA contributed to a family atmosphere where employeesfelt supported and valued.

The second case study concerns the Australian division of amuch larger company, the Compass Group. The intention of in-troducing a share ownership plan was similar to many othercompanies: to motivate staff and encourage them to have an in-terest in their company, while enabling them to share in thecompany’s success. In the process Compass sought to attract aswell as retain high-performing people.

Recognizing the importance of communication, Compass usedan array of approaches supported by a dedicated communica-tions team. The launch of the scheme involved a cascade processoverseen by the HR function, which included an information leafletdistributed to all employees to explain the initiative and how tobecome a part of it. Subsequently, and on a regular basis, staffreceived ‘Katch-up’ newsletter (a quarterly magazine) and ‘StopPress’ bulletin (a fortnightly newsletter) as well as access to updatesand information on the company intranet.

The accent on communication enabled Compass to deal withthe lack of familiarity and understanding amongst employees ofemployee share ownership plans (what they mean, how they workand the benefit for the employee), as well as the potentially de-motivating effects arising from a falling share price.

OTHER STAKEHOLDERSIt is inevitable that discussion of employees and shareholders should leadon to the wider circle of stakeholders in an organization. Although lesslikely to be as directly affected by the successes and failures of the orga-nization, these audiences can still influence its activities as well as beinginfluenced by them. In many respects, this is a development of the dis-cussion of corporate social responsibility in the previous chapter. It istherefore appropriate to consider what interests these audiences repre-sent. These will inevitably vary in importance considerably betweenorganizations, but the most common ones are considered below.

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For many organizations the most influential stakeholder, setting asideemployees, customers and shareholders, is the government, both nationalor local. Not only can it legislate in such a way as to curb or enhancevarious activities that the organization wishes to undertake, but it is alsoa notable beneficiary through taxation. Engaging in dialogue with gov-ernment is consequently an important task to minimize adverse effectson the scope of an organization’s activities. More positively, organiza-tions can also work with and support government in the development oflegislation that will assist other groups such as consumers.

Included under a broad heading of government are the various regu-latory bodies that implement legislation, set standards and oversee theactivities of organizations in particular sectors. In addition, there aremany NGOs (non-governmental organizations) that operate at a nationalor international level, which while not being affiliated to governmentscan nevertheless lead thinking and developments in particular areas suchhuman rights or the environment.

One of the ways in which debates about such topics unfold is throughthe media: the press, radio or television. Hence it is also important toensure that good links are maintained with journalists and the variousmedia owners. Those organizations that have a fully staffed press officewill also tend to have people responsible for government liaison. In thisway the organization hopes to keep abreast of developments as well asensure that its voice is heard. The functions that carry out these duties aretherefore similar to an investor relations department in that they are spe-cialized in what they do, and there is no involvement for the vast majorityof employees.

In contrast all employees are interacting with the general public ev-eryday (not necessarily within the confines of their work) and can be saidto be ambassadors for their employers in any activities not directly relatedto their employment. Over and above such interactions organizationshave plenty of opportunities to demonstrate their sense of social respon-sibility through involvements nationally and locally. These includeworking formally with stakeholders such as charitable organizations, ed-ucational establishments, whole communities or groups concerned witha specific issue that the organization wishes to support.

The delivery of the organization’s involvement in such matters mayonly require limited contribution from employees, for instance when thesupport is purely financial. However, in many instances it will requirethe direct efforts of those employees willing, say, to supervise an in-schoolbank, assist with the provision of facilities for disadvantaged children orraise funds for a charity. Involvements at a local level, whereby employ-ees who work in a particular location support activities in that localcommunity, can be a very powerful demonstration of an organization’s


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commitment to CSR, especially given the extent to which customers andpotential customers base their perceptions of that organization on the lo-cal presence. By participating in such activities employees can be said tobe demonstrating engagement with the strategy of the organization andcommitment to it.

A very good example of a marriage between a national effort and link-ages to local communities has been the Tesco ‘Computers for Schools’scheme. Organized and promoted nationally, the beneficiaries are the lo-cal schools that have been able to obtain free computers and relatedequipment, such as digital cameras, as a result of the collection of vouch-ers by those who shop in Tesco stores. The scheme has been in operationnow for 14 years.

Education is clearly an important topic at national level, while primaryand secondary schools are part of the fabric of local communities. Thissector can also be considered as a stakeholder in business life at the ter-tiary level, notably through universities. Here, what is sometimes referredto as ‘academia’ can be considered to be a stakeholder as it is capable ofinfluencing what organizations do and how they behave through the de-velopment of ideas, research and analysis. Another reason for organiza-tions to become involved with academia and partner institutions is thatthey also represent a source of future employees.

Closer to the day-to-day activities of the organization are trade part-ners and suppliers. Apart from very specific transactional dealings be-tween client and supplier, there is usually a mutual benefit in developinga longer-term relationship which is akin to the retention and developmentof employees.

Overall the sort of benefits that accrue from interacting with these otherstakeholders include collaborative learning, identifying solutions toproblems, avoiding conflict and developing a consensus for the future.One particularly good example comes from the West Midlands region inthe UK, which is home to one of the larger building societies, the WestBromwich.

CASE STUDY

With 50 branches the West Bromwich Building Society operatesin some of the country’s most diverse communities. By adopting agenuine diversity programme it has been able to work with thelocal communities to develop new products and services (such asa mortgage that is compliant with sharia law for Muslims) well inadvance of its competitors. The Society has also been able to at-tract the best staff from the different communities. Along with the

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efforts designed to extend the cultural awareness of staff at all lev-els, this recruitment has ensured that the Society is able to demon-strate on a practical level that it understands and meets the needsof existing and potential customers.

In turn, employees are then encouraged to support other orga-nizations such as charities, local authorities, other regional build-ing societies and companies in launching their own diversityprogrammes. The Society also uses broadcast media aimed atAsian consumers using their mother tongue, through advertisingand tailored advice programmes.

The business case for working in the area of racial equality isdefined in the corporate plan, and the financial benefits can beseen in the growth in customer numbers and the extent of the in-come generated from customers of ethnic origin, which is a sourceof revenue that still has tremendous potential for further growth.

INTELLECTUAL CAPITALTurning now to the notion of people and knowledge as capital, the dis-cussion concerning intellectual capital (IC) embodies a desire to managethe sum total of the knowledge and information held within an organi-zation. Gordon Petrash, partner at PricewaterhouseCoopers in Chicagoand former global director of Intellectual Capital and Intellectual AssetManagement at Dow Chemical Co, summarizes the situation as follows:

Managing Intellectual Capital is when you take the three basic componentsof IC – human, organizational and customer/supplier – and make deci-sions with all three variables in the equation, rather than in a lineal pro-gression … everything is considered in a multifunctional, multiperspectiveapproach.

(quoted in Madigan, 1999)

IC is therefore closely linked with the topic of knowledge management,which is discussed later in the book. As with knowledge management,the breadth of definitions of what constitutes IC is somewhat variable.What is common however is the desire to bring greater accuracy to thevaluation of what might otherwise be treated in a set of accounts as in-tangibles or goodwill.

Steven Wallman, senior non-resident fellow at the Brookings Institu-tion and former commissioner, US Securities & Exchange Commission,is quoted (also in Madigan) as saying in 1999:


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You can’t manage what you can’t measure. We are missing, in a major way,some of the real drivers of both wealth and cost in companies by excludinga whole range of things that are normally subsumed under the label of In-tellectual Capital.

And to quote from Reichheld (1996):

Today’s accounting systems often mask the fact, but inventories of experi-enced customers, employees, and investors are a company’s most valuableassets. Their combined knowledge and experience comprise a firm’s entireIntellectual Capital. Yet these invaluable assets are vanishing from corpo-rate balance sheets at an alarming rate, decimating growth and earningspotential as they go. In a typical (Western) company today, customers aredefecting at the rate of 10 to 30 percent per year; employee turnover rates of15 to 25% are common; and average investor churn now exceeds 50 percentper year. How can any company be expected to grow a profitable businesswhen 20 to 50% of the company’s most valuable inventory vanishes withouttrace each year?

In order to realize the ambition of a more precise valuation of such assets,it is necessary to consider what might be included as IC. For some IC isabout the value of items such as trademarks, patents, licences and brandnames. It is therefore an alternative to the description of intellectual prop-erty, and is an area where historically there have been more attempts toincorporate valuations in balance sheets. Sometimes these elements arecategorized together as structural capital, and described in terms of theitems that do not leave the buildings when the employees go home. It cantherefore also include such things as processes, databases and informa-tion systems.

Others will include in their definition of IC something called customercapital, which is made up of the value of the customer relationships thatthe organization enjoys through loyalty to that organization and itsproducts and services. Efforts in this regard have been given a boost asmore organizations seek to put a value on the brands available to them.Such valuations could clearly be extended to other audiences, suchas suppliers, where the continuing relationship is extremely importantto the continuing activities of organization, especially one involved inmanufacturing.

More generally IC is deemed to include some aspects of what is knownby the people in the organization as well. So this is the value that walksout of the door with employees, and in service organizations can clearlyconstitute the vast bulk of any definition of IC.

Although he does not use precisely the same definitions, Sveiby in ‘Theinvisible balance sheet’ used the terms ‘internal structure’ and

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‘external structure’ to encompass those items that others would describeas structural capital and customer capital. The third ‘family’ he labelledas individual competence: the ability of people to act in various situations.It therefore includes skills, education, experience, values and social skillsthat are deployed in developing the internal and external structures.

While competence cannot be owned by the organization, perhaps thestrongest argument for trying to include a valuation in the balance sheetis the simple difficulty of envisaging that organization without any peo-ple. Sveiby goes on to argue that part of the cost of this arrangement is inthe commitment (not shown in a balance sheet) to pay pensions, goldenparachutes, redundancy payments and other monies upon departurefrom the organization by way of acknowledgement of the contributionmade.

Another way of looking at the knowledge possessed by an organiza-tion is to split it in the way sometimes used in knowledge managementinto tacit and explicit. Although there is an argument that informationonly becomes knowledge in people’s heads, many use the word tacit todescribe this form of knowledge and describe everything else as beingexplicit. Tacit knowledge is therefore the product of people’s skills, ex-perience and values, whereas explicit knowledge is that which is recordedon paper, in databases and so on.

Knowledge management is particularly concerned with the flows be-tween tacit and explicit knowledge as they represent an attempt tocapture and possibly codify information, skills and experience for othersto use. It is therefore less concerned with the tacit-to-tacit transfer, whichis about sharing knowledge between people, although clearly this is anaspect that is critical in other areas such a team building.

HUMAN CAPITALGiven that this book is concerned primarily with employees, the extentto which they may be considered to make up some of the capital of anorganization warrants a more detailed discussion. The Chartered Insti-tute of Personnel and Development (CIPD) defines human capital as thecontribution of people (their skills and knowledge) in the production ofgoods and services.

As was noted earlier there are now expectations that companies in theUK will include a commentary on human capital in their operating andfinancial reviews, although there has not been any prescription for whatshould be covered in such a commentary. Inevitably, it is a subject thatcreates a lot of debate about what should be included and how thingsshould be measured.


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Some of the important aspects relating to employees are best dealt within a qualitative sense, which immediately makes them difficult to mea-sure. Examples of the more qualitative judgements made about peoplerange from an assessment of their current competencies, through an in-dication of commitment to the values of the organization, and on to theirpotential contribution to the organization going forward.

One person who has attempted to overcome such difficulties isMayo, who in 2001 outlined a detailed framework linking the qualitativeassessment of competencies to financial valuation. In his concept of‘human asset worth’, the value of an individual’s human capital is definedas equal to ‘Employment Cost × Individual Asset Multiplier/1,000’,where the Individual Asset Multiplier is defined as a weighted averageassessment of some of the relevant factors. The important thing is thatit represented an attempt to focus on the value creation of employees.However, given the context-specific nature of such assessments, thereis a limit to the extent to which such measures can be compared acrossorganizations.

The understandable desire to benchmark such measures does raise thequestion more generally about the efficacy of having measures that applyto all organizations. While it is one thing to illuminate a report by record-ing the contribution made by people, it is another to be able to do soconsistently across a diverse array of organizations. There is merit in be-ing able to strive for consistency across organizations in the same sectoror of the same type, but even here there are still challenges that need tobe overcome.

One of the first challenges or debates to be settled is the basis of valu-ation, given that there are a number of alternatives. Some people wouldpropose a valuation that is cost-based: that is, the historic cost of acquiringpeople and skills spread over the expected length of service. It couldtherefore include recruitment and training costs. However, the questionremains whether this is a good guide to the present capabilities of theorganization.

Possibly more helpful is the notion of market value, although this is ofcourse only more helpful in those sectors where there is a ready marketfor people and skills. Equally, it cannot always be said that the cost ofattracting individuals always equates to the value of their role to the or-ganization. This issue is indicative of a broader dilemma whereby the datathat can be more readily collated and are financially based not only havewider applicability but also have more credibility in the eyes of the ac-counting fraternity. Yet, almost by definition, staying with what canalready be easily done means that the frontiers of genuinely measuringthe contribution of people will not be rolled back that far.

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The alternative approach of considering the income potential of indi-viduals has the advantage of relating more closely to the worth of theorganization, although it is a task that is inevitably made easier for thosefunctions and roles, such as sales, that are more immediately linked toincome. This then also brings us back to the merits and shortcomings ofqualitative assessments addressed above.

In the debates that pit flexibility of use against comparability and or-ganizationally specific against generic, it is at least helpful to have aframework of the sorts of measures that potentially could be used. Sucha framework was provided in a report by Neely et al (2002) of the Centrefor Business Performance at Cranfield School of Management in 2002 forthe Council for Excellence in Management and Leadership (CEML). Thisoffered measures of management and leadership under five differentheadings.

First there is morale. This covers the reporting of accidents, sicknessand absences across all levels in an organization. In addition it was sug-gested that turnover be recorded for directors and managers separatelyfrom all employees. Also included under this heading is a measure ofemployee satisfaction, as derived from a staff opinion survey.

The next heading is motivation. Under this come the completion ratesfor appraisals, the percentage of jobs with job descriptions, written state-ments of objectives and documented appraisals that have been agreed.Staff opinion surveys would then contribute by way of the understandingemployees have of the organization’s vision and strategy. As withturnover above, working hours and retention rates would be recordedseparately for directors and managers and for employees as a whole.

The third grouping is investment in people and this is represented bytraining as well as benchmarked remuneration levels, director/managerremuneration as a percentage of the total bill for remuneration, and theHR spend per employee.

Long-term development represents the fourth heading. This includesan assessment of the current and potential management and leadershipcapability, an indication of the management and leadership skills gap; thepercentage of jobs with emergency cover and with long-term cover; thepercentage of job holders with agreed development plans; the proportionof jobs with competencies that have been audited; and training days held.

The final area is external perception, which is represented by such fac-tors as the ratio of job applications to vacancies and of job offers toacceptances.

As is inevitably the case, some of the more useful items are those thatare more difficult to value, the main point being that increasingly effortsare being made to attach a value where previously no attempts have beenmade. As Sveiby also pointed out, care needs to be exercised in relating


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the valuation of the assets in the balance sheet to the market value of acompany. Using Nokia as an example, he demonstrated the fluctuatingmarket value of an organization when it is extremely unlikely that therewas a comparable fluctuation in the value of the human capital.

The measures of management and leadership above also serve to un-derscore the importance of drawing upon a range of sources, and thebenefits that can accrue from the appropriate functions (finance, HR,market research and so on) working together to produce the most relevantand meaningful measures.

CONCLUSIONSThe interaction between owners, managers and employees can be as rel-evant to the continued success of an organization as the interaction withcustomers. To facilitate the coordination of direction and effort there arebenefits in giving employees the opportunity to participate directly in therewards available when the organization is successful. There are a num-ber of ways in which this can be achieved when the organization is acompany with share capital.

Yet irrespective of the nature of ownership it is still possible to conferupon employees varying levels of participation in the management of theorganization. In addition it is also clear that there have to be effectivechannels of communication to ensure that the efforts of employees aredirected wisely, and that they are able to participate in the managementof the organization as befits their capacity as owners.

At the same time, the recognition of the importance of employees toall organizations has led to efforts to measure their contribution. In ac-counting and economic terms this has led to the blurring of the distinctionbetween labour and capital. In order to provide effective measures forfinancial reporting the debate continues about the most relevant ways ofcollation and recording data. In practice it is always likely to be a combi-nation of various sources and types, drawn from financial accounts, HRrecords, research surveys and other sources.

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Employeeresearch and thecommunicationscontext

4

INTRODUCTIONUp to this point there have been various references in the book to com-munication. Employee research assists with the development of commu-nication; it is itself a means of communication while it is also an activitythat needs to be supported by other communications channels. It is there-fore highly relevant to consider the main ways in which communicationoccurs in an organization. Communication is after all the means by whichthe demands of the organization and the potential contribution of theemployee can be aligned or calibrated. It facilitates the adjustment of pri-orities as well as the development of individuals and the functioning ofteams to maximum advantage.

Given that the context is one of communication both to and from thosewho manage the organization and those who work in it, a broad catego-rization of activities separates those channelled through representativesfrom those that can take place directly. This chapter develops this cate-gorization and considers the principal ways in which communicationtakes place. In so doing it also considers the opportunities for these cha-nnels to complement and be supported by the use of research techniques.Additionally, since an organization will communicate with other, external

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audiences in ways that could influence employees indirectly there is cov-erage of the main ‘indirect’ communications channels.

REPRESENTATIVESTurning first to communication via representatives, it is possible to sub-divide these into those who are independent of the organization’s man-agement and those who are part of the organization’s management team.

Independent representativesTypically in an organization where the workforce has representativesthey will meet with the management team to discuss issues in a structuredenvironment such as a committee, joint working party, council or forum.Although such bodies can deal with issues beyond those prescribed incollective bargaining agreements, the extent to which this is possible isdependent on the mutual trust that develops between the parties in-volved, a process that can of course take time and effort both at and awayfrom the committee meeting room.

The benefit to employees of voicing their concerns through a repre-sentative in this way is that it gives them licence to air views that theymay not feel able to assert more directly, for fear of retribution. This inturn gives envoys the challenge of ensuring that the views they presentare indeed representative of the workforce as a whole and not just of thoseprepared to speak up, or those with the loudest voices.

The most obvious examples of representatives acting on behalf of theworkforce in these situations are trade unions and staff associationswhich represent those employees who are their members, both collec-tively and individually (for example, representing them at tribunals). Themembers of these bodies are likely to feature prominently as informationand consultation representatives under the new regulations (discussedlater in the book) which will have the effect of widening the pool of em-ployees who act in such a capacity.

Where trade unions are recognized by an organization for the purposesof collective bargaining, they clearly play an integral part in the life of thatorganization. Indeed, even when an activity such as a company-wideemployee survey is planned and implemented by external parties suchas market research agencies it is important that the relevant union is con-sulted in advance to maximize the participation of the workforce.

Management representativesThe role of line managers and supervisory staff employed directly by anorganization is particularly pertinent to the discussion about the way in

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which information is disseminated. Although by definition these are partof the organization’s management structure, they can also be said to actas representatives of the employees they oversee. If the system is func-tioning well they should act as the fulcrum in the communication balancebetween individual employees and those in management who are re-sponsible for the direction of the organization.

Although there is much discussion of the benefits of flat organizationalstructures, with minimal management hierarchy, it seems safe to assumethat organizations of size and substance will continue to operate thesechains of command. Apart from anything else they offer a means of iden-tifying future management potential. The ‘assault course’ that is corpo-rate life does mean that (without recourse to recruitment externally)potential leaders can be given incremental responsibilities and an assess-ment can be made of those who will best handle responsibility for theentire organization.

In addition, flat structures, while attractive in some respects (being theantithesis of a long chain of command with the attendant danger thatthose at the top are too far removed from the ‘coal face’), do not affordthe perception of progress and potential career development that is morereadily satisfied by a series of promotions.

Given the probability that many organizations will continue to operatea hierarchical structure, there will remain a need for management at eachlevel to communicate with those for whom they are responsible. Thechallenge, according to Jocelyn Johnson (2000) is for managers to demon-strate greater empathy with their subordinates. She reported on a large-scale study amongst managers and their colleagues in the public sector.This showed that the managers were considerably more positive aboutthe work climate and culture than those who worked for them. It is con-sequently difficult to expect managerial and supervisory staff to accu-rately report back the views of those they are responsible for because theymay lack empathy for how they actually feel about such matters. Henceit is important to have available the means of acquiring feedback inde-pendently from the management structure as well as through it.

Examples of ways in which there is a flow of information between em-ployees and the organization and which depend on the line manager areexamined in the following sections.

Briefing meetingsFrequently used to disseminate information on major developments orupdates on progress and performance, these meetings are an opportunityfor teams to gather in person and discuss local issues and problems. Insome organizations such meetings are a regular feature, and there is a mixof local and strategic topics. When the topics are about the organization

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as a whole they may also involve the use of some of the direct commu-nication methods (such as videos) discussed later in this chapter. Inessence these meetings are about face-to-face communication, under-standing, informing staff of developments and decisions that might affectthem and gaining feedback.

Among the qualities required of the manager who leads the meetingsis commitment to ensure that such meetings take place according to atimetable that accommodates as many of those who need to be involvedas possible. This in turn assumes an ability to plan and sequence themeetings, which can be assisted by the creation of a routine so thateveryone knows the days and times that they can expect such meetingsto take place. Where a routine has been established, there will be occasionswhen the manager is unable to attend, in which case the commitment andplanning has to extend to organizing an appropriate deputy to lead themeeting.

The presentational capabilities of the manager are of course crucial tothe effectiveness of getting the key messages across in a way that is rele-vant to the group of employees. When such meetings are part of a cascadeprocess this is particularly important, otherwise the message received bythose at the end of the sequence will be far removed from how it startedout. (With apologies to those unfamiliar with pre-decimal currency, oneof the best examples of how this can go wrong is an apocryphal tale frommilitary circles. A general wished to relay the message, ‘Send reinforce-ments; we are going to advance.’ Unfortunately, there was bemusedreaction when the final recipients in the chain were informed, ‘Send threeand four-pence, we are going to a dance.’)

In addition, the manager also determines how effective such a forumis for discussion and communication up the line to the management team.Apart from the communication skills of the manager, there must be awillingness to put aside personal concerns about how the message, whichwill sometimes not be palatable to senior management, reflects on thebearer. There is also an obligation on the part of the manager to ensurethat actions are taken arising from any feedback gathered. Where respon-sibility for a particular area or subject lies outside the team giving thefeedback, this requires at a minimum that the manager of that teamensures the feedback reaches the relevant recipients.

The meetings can of course be used to advantage as a means of com-municating across the organization. For instance, the manager of oneteam might describe their duties and responsibilities to another team witha view to promoting closer cooperation between the two functions. Herethe ambassadorial qualities of the manager need to be in evidence.

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AppraisalsAlthough not normally regarded as a medium of communication be-tween the organization and employees, the formal review meetings thatare an essential component of any appraisal system do of course meanthat employees learn the extent to which they are valued. Ideally thisinformation is communicated informally in the normal course of busi-ness, although the review meetings, which should be at least an annualevent and preferably take place two or three times a year, create the op-portunity for progress to be recorded against specific objectives as wellas in personal development.

As well as giving individual feedback, such discussions are importantin placing the performance of individuals in the context of the widergroup of which they are a part. As a consequence individuals should learnhow well the group as a whole is performing, and may well receive anindication how their own performance compares with others in thegroup.

Feedback for the purpose of appraisals is of course not limited to linemanagers. Appraisals are an opportunity for managers to collate theviews of their peers as well as those of the person being appraised. Some-what less common is the practice of including the views of an individual’ssubordinates. This approach of obtaining the views of the complete spec-trum of those who come into contact with the individual is generallyknown as 360-degree feedback, and requires high levels of integrity toensure that it retains credibility.

However the appraisal process is practised, the attendant formal re-view is likely to take the form of a face-to-face meeting, with the conse-quent opportunity for the employee to voice observations and concernsof a wider nature. The extent to which this feedback is passed on or actedupon will depend on the line manager who receives this information –much in the same way as was noted above regarding briefing meetings.

DIRECT COMMUNICATIONSDirect communications are those media that do not depend on interme-diaries such as representatives or line managers, and provide a means bywhich the entire workforce can be addressed in the same way. It is im-portant to consider these as supplementing, rather than competing with,other forms of communication. Much in the same way that an organiza-tion will address its external audiences through a combination of methods(such as television advertising, direct mail and PR), internal communi-cations also benefit from using a variety of media which complement eachother.


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Conferences and other large-scale meetingsOccupying some of the central ground between other direct media andthe briefing meetings for smaller units and teams referenced above,conferences and other large-scale meetings will typically be addressedby senior executives and used for more strategic messages. Gatheringeveryone possible from the organization at least ensures that the samemessages are received by all concerned. Indeed, the use of video linksmeans that employees at different locations can be party to the sameevent.

Unlike other direct media discussed below, these meetings offer theopportunity in theory to incorporate some element of feedback and con-sultation. Indeed they are sometimes referred to as town hall meetingsprecisely because of the intention to gather the views and opinions ofthose attending. One particular example of this practice by Sears is re-ferred to in Chapter 2 when discussing the employee–customer profitchain. The innovation employed by Sears was to combine this style ofmeeting with the use of learning maps. The latter provided the contentand required people to make use of their analytical skills, whereas theformat of the meetings facilitated the conversion of that learning intoaction.

Whatever the format of such meetings, they demand considerable ef-forts in planning and execution given the sheer number of participants,the time devoted to them and the fact that employees will typically havehad little time to digest the information received before being asked torespond. It can therefore make sense to have a separate channel (distinctfrom as well as subsequent to the meeting itself) in order to collate feed-back on, say, the content, handling and effectiveness of the session.

Video and other broadcast mediaThe use of video has long offered a complementary as well as an alter-native medium for communicating corporate information and strategies.It is complementary in the sense that, for instance, video footage can bedeployed to great effect at conferences or team meetings. In addition, itis a cost-effective way of encapsulating the content and atmosphere ofconferences for the benefit of those unable to attend in person. Yet it canalso be a stand-alone medium, suited to communicating information andguidance on topics that warrant reinforcement with repeated viewing,such as health and safety issues.

The economics of producing video tapes (and more recently DVDs)depend on the number of copies required, with the marginal costs of eachextra one minimal in comparison with the cost of producing the original.Given the costs involved with video production, and the potential impact

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on the viewing audience, it makes eminent sense to undertake some re-search to check out the strategy and execution before distribution,much in the same way as research is an integral part of advertisingdevelopment.

Assuming that there is an effective method of distribution, one of themajor benefits that can be realized from video is the opportunity foreveryone in the organization to view the content at the same time. Whathas encouraged some organizations to go beyond video and to set up theirown broadcast media or television channel using satellite technology isthe requirement to do this while also communicating in a timely fashion.So where there is a premium on speed and timeliness of information, toensure that people in the organization are able to keep pace with devel-opments, investments in the technology can be justified.

The use of video and television does imply that communication is one-way: from management to the workforce, although if a showing is incor-porated into a team meeting it is possible that there can be somediscussion and feedback via the person leading the meeting. One of thelimiting factors in such arrangements is the size of any group that hasaccess to a television monitor and video or DVD player.

Meanwhile the profusion of desktop PCs along with the developmentof intranets (internet protocol or IP networks) has resulted in many otherpossibilities opening up. Apart from it being a store of knowledge andinformation, an intranet is also a potential delivery channel for videocontent. This means that live events can be broadcast to every desktop,and it also opens up possibilities for conferencing between people in dis-parate locations. Inevitably those organizations operating at the forefrontof the technology such as Cisco are leading the way in using it for thepurposes of internal communications. There is a clear cost advantage ofusing these channels over their predecessors, and there is even morescope for saving time and money when they are contrasted with gatheringpeople together in conferences and meetings.

However, it has to be remembered that there are still many organiza-tions, indeed many jobs in a variety of organizations, where the desktopPC, let alone the laptop or notebook, is not commonplace. In addition, byrelying on a channel that delivers content to individuals, the need forgroup interaction, discussion and feedback can be overlooked to the po-tential detriment of the team and possibly the organization as a whole.

IntranetsIncreasingly, written material that once would have been printed anddistributed is now to be found electronically. It may still be distributed toindividuals, say in the form of a CD, but it is as likely to be found onshared network drives and intranets. A clear benefit of being able to access


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information on an intranet is that it can be updated frequently withoutincurring the printing and distribution costs of hard copy versions. Thisalso gives the organization considerable flexibility in the content that itmakes available to employees, and provides for more open access to in-formation across the organization.

Other benefits include the financial gains from cost savings in dealingwith technical support queries electronically via FAQs (documents de-tailing frequently asked questions with answers) and a reduction inexpenditure in terms of implementation, training and running costs. Inaddition, the technology involved means an intranet can sit alongsidelegacy systems without requiring large amounts of capital expenditure.

The in-house equivalent of the internet has been around since themid-1990s, and through making information available across organiza-tions has the potential to be a force for democracy and decentralization.With some of the gains inevitably comes some cost; functions with theresponsibility for centralized libraries will either have been the champi-ons of an intranet or seen their jobs disappear as a consequence.

The obvious content for an intranet consists of such items as directo-ries, thereby avoiding the problems of always having something that isout of date as soon as it is published. More debatably, an intranet shouldoffer some external sources of information. Access to the internet and theworldwide web is contentious in some organizations. While it opens upthe possibilities for accessing information and ideas, there is neverthelesssome reluctance because of expectations of abuse and time-wasting. Thecorporate view that is taken on such matters is in itself an interestingcomment on the issue of trust within the organization.

Essentially, most employees will respond positively to being entrustedwith something, and will be reasonable in their usage, much in the sameway that they have been with the telephone. What is required is guidanceon what is acceptable, and many organizations have dealt with this situ-ation by requiring employees to sign up to a code setting out the respon-sibilities attached to being given such access.

In considering the content available on an intranet site, the challengeis to identify what has sufficient relevance to the maximum number ofpeople. Indeed, there can be the danger with something like an intranetthat it is assumed to be the answer to all problems, with the consequencethat it becomes overburdened with information that is not of interest.Without adequate controls the information may also be presented in sucha way that it is no more accessible than what went before it. In addition,it is quite possible for an intranet to be developed quite separately from,and hence not fit with, the other communications media used by theorganization.

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It is therefore critical that an intranet should be established with thesame planning and testing rigours that would be applied to any othernew system, along with the opportunity for users to comment on devel-opments. This can be done in advance of implementation through suchtechniques as usability testing, or subsequently, through other feedbackchannels.

When deployed successfully, an intranet can become a strategic toolthat facilitates the sharing of best practice and provides the opportunityto improve service to customers. This is particularly true where the in-tranet assists the organization to span functional as well as internationalboundaries.

As with all such developments it is important not simply to expect itto just do the same things in a different way: for example, by transferringthe existing paper library into an electronic form. The opportunity is thereto do new things as well, not least of which is assisting the collaborationbetween fellow employees. As such the technology is the facilitator notthe arbiter, and the organizational and human factors should be at theforefront in guiding any developments. With more organizations think-ing about the integration of data and voice traffic on networks it is notsurprising to find that some supplement the information available froman intranet by providing the facility to listen to pre-recorded and regu-larly changed bulletins about matters of interest on an internal telephonesystem.

Whether the technological developments do represent genuine ad-vances or not, they have been accompanied by additions to the vocabu-lary. So there are webinars, which are seminars (or lectures or workshops)transmitted over the web. Quite often used for training, the event can bestored as a file and accessed by anyone who wishes to at a later time.Unlike a webcast, which is closer to being a web equivalent of a televisionbroadcast, a webinar has the advantage of being interactive.

Another development occasioned by the technology is a blog or weblog. Compiled by the blogger (a person who blogs), this is a journal thatis posted online and which has the possibility of adding interesting con-tent to the site as well as prompting debate and discussion on any issuesraised. Microsoft, for instance, specifically encourages the use of blogsparticularly in the area of development projects so that a wider audiencecan be informed of progress.

E-mailRather than relying on employees to visit an intranet, organizations cansend information direct to individuals via e-mail. Of course the messagecould simply be an invitation or direction to the intranet to view new


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content onscreen (much in the same way that a poster would invite em-ployees to a meeting in the non-electronic equivalent).

For those organizations without intranets, e-mail will be an importantmedium of communication in its own right. In addition, it is of course amedium that facilitates two-way communication, so that recipients of anymessage can immediately engage in discussion if so invited. One point tobe borne in mind here is the potential reluctance of people to make theircomments directly, particularly in respect of more controversial issues,when this medium does not offer them the cloak of anonymity. Equally,care has to be exercised so that the other extreme, whereby the sendermay potentially be overwhelmed with responses, is catered for throughthe use of a dedicated address to which replies can be sent.

As with intranets, there can be a danger that those who have the meansto communicate in this way make the mistake of assuming that everyonein the organization has access to similar technology. So whether the sceneis a production line, a retail shop or even a bank branch, people may atbest have restricted access to a PC, requiring communication to be tailoredto their circumstances.

Magazines and newslettersMany organizations produce in-house magazines or newspapers/newsletters. These represent another way in which corporate messagescan be communicated to all employees. However, it is important that themedium does not become associated completely with a management per-spective, as this can dilute the willingness to read or accept the content.

Nokia is an example of a company that produces such a magazinecalled Nokia People. It is published in the four most common languages inNokia, English, Finnish, Chinese and German, eight times a year, and hasa worldwide circulation in excess of 50,000 copies. As well as providingcoverage of business stories and achievements it also devotes space topeople stories and such matters as community involvement.

By extending the scope of such publications to social and personalnews, the editorial board does depend on readers contributing directlyto the content of the publication. The extent to which readers take up thisopportunity will depend, as it does with other forms of soliciting feedback(notably research surveys) on the perception as to what will happen as aresult. Clearly, if the editor is reluctant to publish contributions that arecritical of the organization or no one ever takes any notice of what iswritten, however often it gets mentioned, the supply of contributors willquickly dry up.

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Posters and notice boardsWhile there has been a sizeable shift to their electronic equivalents, it isworth mentioning that there is still a role for the more traditional methodof communicating via posters and notice boards. They will continue to beimportant both where employees do not have access to electronic mediaas well as a supplement to other means of communicating.

Clearly the location of a poster or notice board is crucial to its effec-tiveness in being seen by those for whom it is intended. It is also a mediumthat can suffer from lack of maintenance and overload.

Company bookletsOne example of a company booklet is the type of literature handed outas part of the induction process to give new recruits useful informationabout working in the organization. Then there are handbooks for all em-ployees detailing company rules, policies and procedures, benefits andcontact details. In the printed form such documents tend to err on the sideof containing information that does not need to be updated too frequently.

Suggestion schemesAlthough common in organizations, suggestion schemes are differentfrom all of the other direct channels described above in that the primaryintent is not to inform employees but to solicit thoughts and ideas fromindividual employees. The manner in which suggestions are dealt withcan of course have a motivating or demotivating effect on that individual,but it is one of the few channels designed specifically for communicationfrom employee to organization, albeit with a limited frame of reference.

There are many ways in which organizations seek to encourage em-ployees to contribute suggestions about how improvements might bemade. The principal requirements of any scheme are that suggestions aredealt with promptly (a response time of a week should be achievable) andin a way that is seen to be fair and reward those who offer worthwhilesuggestions. In so doing it has to be recognized that some individuals mayprefer to remain anonymous.

Dealing with suggestions promptly in turn requires those entrustedwith making a decision to be empowered by the organization and ac-cepting of the responsibility placed upon them. This raises the questionwhether employees should be permitted to make suggestions about theirimmediate job or team that qualify for an award, or whether that is some-thing that should be a part of their role anyway. In addition, whereemployees make suggestions as to how improvements can be made inother areas, there is always the concern that such ideas may be greeted by


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almost a xenophobic, ‘not invented here’ type of attitude, or dismissed ashaving been considered and discarded some time before.

As can be seen with other communication channels, a suggestionscheme benefits from being seen to be acted upon and suffers if it is not.If handled badly it may therefore create as many problems as it seeks tosolve. As well as encouraging suggestions through a variety of channels(e-mail, voice mail, fax, post and so on), there should be publicity for allsuggestions in order to acknowledge the contributions as well as to en-courage others. Indeed, some ideas may not themselves be that useful butcan spark a thought by somebody else who ends up with a successfulinnovation.

Grievance proceduresA formal system for handling grievances is another example of a channeldesigned to convey messages from the individual to the management ofthe organization. Again it operates within a very specific frame of refer-ence, but on this occasion is a system that ideally is never used at all onthe basis that other channels of communication through managerial andsupervisory staff should have been able to resolve the concerns raised.

KNOWLEDGE MANAGEMENTUltimately the aggregation of all sources of information can be describedin terms of knowledge management. Most people recognize that raw dataneeds to be translated into information, and that for any value to be de-rived from that information it has to be capable of being applied. Yet thereare a variety of definitions of what constitutes knowledge managementand the practice of it will probably be unique to each organization.

The philosophy behind such a development is inspired by the desireto create an environment in which the information is not only applied(that is, turned in to knowledge), but also fosters continuous learning. Ittherefore also encompasses the knowledge and learning of individualemployees as well as the corporate sources.

The businesses that adopt such an approach therefore regard knowl-edge as a resource to be valued in its own right. As a consequence thedevelopment and sharing of knowledge is something that warrants itsown space in corporate life. To quote Thomas A Stewart (1997), ‘Becauseknowledge has become the single most important factor of production,managing intellectual assets has become the single most important taskof business.’

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THE COMMUNICATIONS MIXIn the main, methods of communicating directly with employees do notallow for a dialogue: they are principally the means by which an organi-zation provides information and seeks to exhort employees to do moreor different things. The way in which the message is received is critical tothe way in which it is responded to. Therefore being aware of the issuesthat are uppermost in the minds of employees at any one time is some-thing of a Holy Grail for communicators. An accurate understanding ofthese issues could for instance influence the timing of any communica-tion, if it is identified that there might be a better time to send the messageout. Alternatively, the message could anticipate concerns of employeesand marry the message content with solutions to those concerns.

In many respects the challenges faced by those charged with respon-sibility for internal communications were answered by Orwell’s creationin 1984 of the Thought Police: ‘How often, or on what system, the ThoughtPolice plugged in on any individual wire was guesswork. It was evenconceivable that they watched everybody all the time. But at any rate theycould plug in your wire whenever they wanted to.’ While no one wouldgo so far as to say that there should be a corporate version of the ThoughtPolice as envisaged by Orwell, internal communications is not simplyabout determining the message to be put across to employees, it is alsoabout judging the mood of the audience and anticipating how the mes-sages will be received.

The impact of any communication is a function of the way in whichit is delivered and perceived as much as it is a function of the contentcontained within it. It is therefore highly desirable to be able to tap in tothe mood of the workforce in order to position any communicationeffectively.

CASE STUDY

A leading retail bank explored several avenues in an attempt toidentify a solution to this need for proactive feedback. For instance,the in-house journal had a small network of correspondentscharged with providing material that reflected the activities andperspectives of employees in different regions. The regional train-ing centres were also seen to represent a useful ‘melting pot’ ofstaff from a wide area who would, over the duration of a two orthree-day course, talk openly to tutors about life in the bank.

Neither of these avenues met the need, as there was reluctance toget involved on the part of those being asked to be intermediaries


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in this ‘trafficking’ of information, either because it represented anadditional workload or because it was felt that there was an ele-ment of ‘telling tales’. The Catch 22 here was that if the individualsexpressing the views were told what would happen to any com-ments they made they would clam up, while if they were not toldand spoke freely, the correspondents and tutors felt guilty aboutsaying too much.

Meanwhile, an internal telephone unit was set up and resourcedwith the help of external and independent researchers, largely witha view to conducting surveys amongst employees. While this wassuccessful in terms of the volume of work that went through the unit,the costs of undertaking what would amount to a substantial, con-tinuous study militated against using the unit for the purpose oftracking those ‘top of mind’ issues amongst employees.

The advent of a company-wide intranet opened up the possi-bility of using a chat room so that staff could initiate discussionson the topics that were concerning them, as benevolent a versionof the Thought Police as might be imagined. Unfortunately thebank shortly afterwards received an approach which led to atakeover battle, and although there was a lengthy and spiriteddefence, it ultimately resulted in the bank being taken over. In-evitably during the defence, which involved a change in the seniormanagement team, the intranet became so overwhelmed with re-lated topics and observations that the chat room facility was closeddown. However, it had demonstrated that within sensible param-eters it represented a barometer of the depth and breadth offeelings that were uppermost in the minds of employees at any onetime.

When considering the mix of communications media to be used in anysituation, it is also important to recognize the way in which employeesare being bombarded with messages from many directions, much as anyother audience is in this day and age. Unfortunately, in some organiza-tions there is a belief that because a message has been sent out that it hasbeen received and will be acted upon by all recipients. The reality is thatthere is leakage or wastage from the point at which the communicationhas been sent. It can almost be guaranteed that not everybody will havereceived it: no one channel is perfect and awareness of 100 per cent is veryrarely, if ever, achieved in any field.

Even when the message has been received there will inevitably bevariations in the way in which it is interpreted and acted upon. Hence it

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is necessary to check the take-out from any communications exercise aswell as to identify how well different channels have performed in deliv-ering the content of the message.

INDIRECT COMMUNICATIONSIndirect methods describe those where the employees are an audience forthe communication but not necessarily the principal one. This section isnot therefore concerned, as some might have anticipated, with corporategossip or the rumour mill. Although frequently shown in surveys to be avalued source of information by employees (even if it is not a channelthrough which they want to receive information), rumour/gossip flour-ishes because the organization allows it to inhabit a vacuum by virtue ofthe ineffectiveness of more formal channels of communication.

The concern of this section is those communications which almost bydefinition, if employees are not the primary audience, are aimed at ex-ternal audiences. Given the point above about rumour and gossip, it isclearly sensible to make available such communications to employees sothat they are clear how the organization is presenting itself to other au-diences. The simple act of doing this will also help to eliminate anydissonance that can arise if the organization appears to be saying onething externally and another thing to its workforce.

AdvertisingAbove-the-line advertising, notably that on television, is a particular ex-ample whereby the organization is addressing the general public, and inthe course of so doing will be communicating with its own employees.Indeed, some advertising campaigns specifically portray employees andeven go as far as to make employees the ‘heroes’. An example is the ad-vertising by Direct Line, which ran a campaign in which call centre staffwere shown literally as superheroes from television and film (for exam-ple, Charlie’s Angels) who went to great lengths to assist customers withtheir problems.

Other organizations (Asda/Walmart and ABN Amro are recent ex-amples) cast their own employees in advertisements. In the UK the mostfamous example of this is probably the Halifax. Seeking to take on thetraditional retail banks, it decided to position itself and communicate asa retailer. The decision was taken that all advertising would focus on thevalue of its services, and that it would target customers from the clearingbanks. It also wanted to use advertising that would help motivate acustomer-facing workforce. Out of this came the ‘Staff as Stars’ campaignfeaturing real Halifax staff, and the success of the first advertisement


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starring Howard Brown launched a second career for him as the face ofthe Halifax.

Although typically it is organizations in the services sector such asbanks, utility companies, supermarkets and airlines that use advertisingin this way (reflecting the fact that the delivery of a service by employeesis effectively what determines the success or otherwise of those organi-zations), it is surprising just how many advertisements in any one breakdo show the interaction between an employee and a customer.

When this is done well there is scope for impressing both customersand employees. Occasionally, advertising can attempt to appeal to cus-tomers by poking fun at or belittling employees (any advertising thatpokes fun at or belittles customers is of course taking that organizationinto very dangerous territory). The clear danger here is that employeesmay not share the joke and will feel slighted, with an immediate impacton morale and pride in their work.

Even rarer is that classic example of advertising that succeeds in alien-ating all the primary audiences. The best example in recent times is theadvertising by Sainsbury’s in support of its 1998 ‘Value to shout about’campaign, featuring John Cleese. While people may not have been awareof the sequence of events that led up to those adverts appearing on screen(including the withdrawal of the principal character around whom theoriginal strategy had been devised, and the replacement by Cleese) whatis remembered is Cleese as a store manager hectoring the customers in away that embarrassed the workforce.

Finally, it is worth mentioning that some organizations take the op-portunities afforded by television advertising to go one stage further andaddress their employees directly. By using one of the cheaper ad breaks(for instance, early on a Sunday morning) it is possible to communicateto all employees irrespective of how widely spread they may be aroundthe country. This is an approach that has been favoured by companies inthe financial sector, such as banks and insurance companies where theworkforce is spread over a national network of offices and branches.

The cost of the air time means that the message does not have to berestricted to the normal length of an advertisement, although clearly itstill has to remain succinct. A common reason for adopting this approachis to showcase a new advertising campaign, so there can still be benefitderived from other audiences who may happen to be viewing at that time.

Annual reports and accountsA requirement for publicly quoted companies, and good practice formany other organizations, the annual report is an opportunity to reflecton progress and to set out aspirations for the future. Although the primaryaudience for quoted companies will be the investing public, even where

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employees are not themselves shareholders the likelihood of them be-coming aware of the contents is very high, particularly as the documentswill be accessible online.

Care therefore has to be exercised in making statements in these doc-uments, say, to the effect that employees of the organization are its ‘mostvaluable asset’. Sadly, the employees may not recognize this to be thecase, and all too often the truth is closer to the view expressed by thecharacter known as the Pointy-Haired Boss in the Dilbert cartoon strips.He admits that he was wrong to have made such an assertion, and correctshimself by saying that ‘Money is our most valuable asset. Employees areninth’, before going on to explain that they come just after carbon paperin the pecking order!

The description of employees as the most valuable asset is the sort ofstatement that is clearly made with the best of motives, and it is in allprobability a strongly held belief. Unfortunately the opportunities for itto be a statement unsupported by actions are legion, with a resultant cyn-icism and loss of trust amongst employees.

Television, press and other mediaAll too often, employees first learn about significant developments byreading press articles, watching the news on television or browsing onthe web. Where the organization concerned is a company, and is boundby local stock exchange regulations requiring it to inform the stock marketon which it is listed before anyone else, it can be an insuperable problemto inform employees ahead of such an announcement. The relevant au-thorities take a dim view of such information being leaked and notdelivered through the appropriate channels.

However, there are occasions when employees learn indirectly aboutdevelopments that are not likely to affect the company’s share price, andthe effect can be demotivating, particularly as the reporting may not fullyreflect all of the relevant information, yet the report will still colour per-ceptions of any subsequent official communication.

Again to illustrate the antithesis of how such matters should be han-dled we have to look no further than another of the inspired Dilbertcartoons of Scott Adams. In this one the Pointy-Haired Boss is talking tothe HR director. One says to the other, ‘We need to tell our employeesabout the merger,’ to which the reply is, ‘They’ll read it in the news. Whyshould we do the extra work?’

Employees have a very reasonable expectation of being informedabout developments that affect their company and their job ahead ofanyone else, and ideally would like to be given this information in personby their superiors.


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EMPLOYEE RESEARCHThe use of market research techniques and approaches is primarily aboutgaining the views of the workforce, and as such may not appear to bemuch concerned with the flow of information to the workforce. Yet irre-spective of which research methodology may be in use at any one time,the way in which the workforce is informed about the research, how theyare invited to take part, along with the subject matter of the research, andany actions that ensue from it will all be saying something to the recipientsabout how the organization views them and the topics under discussion.As a consequence it becomes another form of communication to theworkforce, who can be motivated or demotivated by it according to theirperception of the exercise.

CONCLUSIONSAlthough this chapter is not an exhaustive catalogue of the ways in whichcommunication takes place, it nevertheless is a demonstration of the va-riety available. The permutations and combinations of media deployedat any one time need to be managed to maximum effect in order to achievethe goal of a uniform understanding across the workforce.

In addition to offering an independent and objective means of collatingthe views and opinions of employees, which complements other chan-nels, research studies can inform both communication strategy and tac-tics. At the strategic level research can, for instance, provide inputs aboutwhat needs to be communicated, while tactically it can assist with theselection of the most appropriate media and the way in which the chosenmessages might best be presented. Subsequently research can be used tofollow up these communications to gauge their effectiveness, say, by as-sessing awareness or monitoring any changes in behaviours.

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Good practice insetting up a survey

5

INTRODUCTIONOnce it has been determined that some form of research is required thereare many possibilities for what can be done. This chapter therefore goesthrough the prerequisites for, and the various stages of, a successful sur-vey. In the process the emphasis is explicitly on those studies designedto generate output in the form of numbers (that is, quantitative research).Chapter 7 examines the requirements for and benefits of conductingqualitative research.

PREREQUISITESIt is critical to be absolutely clear on the specific objectives for the research.Not only will this lead to the identification of the optimal means of col-lecting the required information, it will assist with the task of gainingsupport for the exercise and ultimately the implementation of actionsgenerated by the feedback gained.

Sometimes surveys are conducted for reasons that may make sense tothe person commissioning the research, but if the logic is not compellingto others in the organization the exercise is doomed to failure and couldeven be counter-productive. Occasionally a survey will set out to gatherdata that is not relevant or of interest to those being asked to participate,with the probable consequence that they will not respond. Indeed, if it isseen as an opportunity missed to gather meaningful feedback, employeesmay even feel demotivated by what they perceive to be a lack of intereston the part of the organization.

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Where these situations arise they can reflect emotions such as fear onthe part of those commissioning the study: fear of what they will actuallylearn should they ask the ‘right’ questions. Alternatively they can beguilty of excessive pride in believing that they know what the issuesshould be and what the answers are. Whatever the reasoning, there areclear dangers that the effectiveness of the study will be undermined if theagenda of the person commissioning it is not in tune with the needs orwants of the people being asked the questions.

As importantly, and probably more pertinent to employee researchthan any other type of research, there must be a commitment by the man-agement of the organization to act on the findings. This in turn will leadto a greater involvement amongst employees. While low survey responserates can be a function of various factors (such as perceived lack of con-fidentiality or poor survey design), significant among them will be pre-vious failures to provide honest feedback on the results or to provide astatement of what action will be taken.

WRITING A RESEARCH BRIEFWhether or not an external agency is employed in such projects (the ben-efits of using one are examined later), it is extremely useful to write abriefing document that contains all of the relevant information that wouldbe helpful to anyone who is going to be involved as a potential supplier,a coordinator or even a respondent.

The brief should start by setting out the background to the proposedstudy, providing the wider context in which the research is to take place.This will involve saying something about the organization, its structureand its ambitions, for the benefit of any external parties.

This opening section then naturally leads on to a statement of the broadobjectives for, and specific requirements of, the research that is beingproposed. The importance of clarity and consensus here is best demon-strated at the completion of any study, as it provides the standard againstwhich it is possible to gauge whether the research has provided the in-formation that was needed. Sometimes the research equivalent of ‘mis-sion creep’ can occur, whereby the study ends up answering a differentset of issues from those originally envisaged.

In addition, notably where there is an array of parties involved in set-ting up the study, there can be several agendas and so a realistic aggre-gation of requirements is essential to avoid trying to provide answers toevery conceivable question. When surveys are too long, and occasionallyask unanswerable questions, the net effect is that few people will betempted to complete them and so there will be little by way of usable data.

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As well as defining the primary objectives of the study, a brief shouldalso set out how the results will be used. This helps to clarify the objectivesas well as giving some direction to the way in which the results are to bepresented. The brief may also give guidance on the proposed scope of theproject, including the number, types and geographical spread of employ-ees to be involved in the research. Furthermore it is helpful to include aschedule of key timings or dates such as a target date for the production,and communication, of research results.

Setting out the parameters in this way means that all interested parties,including the management team, can comment on and subsequently en-dorse an approach which will require the commitment of all for it to be asuccess. After it has been agreed, the brief can also provide the blueprintfor communications to line managers, who need to be involved early inthe process as their support is often vital in achieving a positive receptionfor the survey and its findings.

The document can then be used to brief external agencies or consul-tancies, where such assistance is required. In these circumstances it ishelpful to provide additional information, for instance about the availablebudget for the research. Providing this information ensures that the com-peting proposals or tenders will be more easily comparable, and makesthe decision which to select more straightforward. Given that externalsuppliers are not normally reimbursed for the costs of submitting pro-posals, it is usual to approach no more than four for any single project.

RESEARCH OBJECTIVESAlthough the objectives for the research will be determined by the overallrationale for it, as discussed in the previous chapters, it is worth stressingthe choice between two broad perspectives: information gathering andcommunication.

The role of employee research can be seen simply as information gath-ering. Alternatively, it can be seen as information exchange and commu-nication. There is a fundamental difference between these two views. Thefirst tends to limit the role of research to a one-way flow of informationfrom employees to management. The second takes a broader view, defin-ing employee research as a continuous, two-way flow of informationbetween employees and management. This places employee researchwithin the broader context of internal communications, and can help toraise response rates by making employees feel included in the process.

In the context of the ‘information’ model of employee research, objec-tives tend to be stated solely in terms of information requirements. The‘communication’ model demands consideration of wider questions, suchas how the information is going to be acted on by management and how

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these actions are going to be communicated back to employees. Addi-tionally there are matters of implementation: such as the extent to whichemployees will be involved in responding to the problems and opportu-nities that the research raises, or how the implementation of these actionswill be monitored over time.

Quite often the intention will be to keep the channel of communicationopen between employees and management. If so, the way in which it isintended to be handled will need to be set out. All these additional ques-tions will help focus the research on those areas in which the company iscommitted to making real improvements, and help manage the longer-term effects that research can have on an organization and its employees.

THE ADVANTAGES OF USING AN EXTERNALSUPPLIER

While organizations may conduct their own employee research in-house,typically in the expectation of reducing costs, there are various benefitsto be gained from using external suppliers. There is a considerable varietyin the type of agency and consultancy claiming to offer expertise in em-ployee research. The particular benefit attached to using agencies andconsultants affiliated to the Market Research Society is that they arebacked by the Code of Conduct, which was designed to support andmaintain professional standards (see Appendix 2). Adherence to thisCode of Conduct also ensures that research is conducted in accordancewith the principles of the Data Protection Act.

More generally there are a number of benefits to be derived from usingexternal suppliers rather than in-house resources, and the main ones areconsidered in this section.

IndependenceWhen someone is engaged by an organization solely for the purposes ofgathering the views of employees he or she will not be party to the internal‘political’ pressures that exist within all organizations. The benefit here istwofold. First, the perceived lack of bias will encourage full participationby employees. This is particularly important when an organization isconducting such research for the first time and there is no culture of par-ticipating in this type of study.

Without a reference point based on prior experience, employees canbe suspicious about what will happen to any views they express or in-formation they provide. Hence there is a great value in being able todemonstrate quite readily that the researcher has no desire to (indeed,

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has a professional obligation not to) abuse the confidence in which theinformation and views have been given.

The second benefit is that there is no vested interest on the part of theresearchers at the reporting stage. Again their professional integrity re-quires them to report fully and accurately on the views of the employees,and there is no reason for them to do otherwise. In contrast, an employeeof the organization inevitably has links and associations with variousparts of the organization, and so the temptation can arise, for instance, tobe selective in the way results are reported: possibly filtering out resultsthat reflect poorly on certain parts of the organization.

ResourcesProgrammes of research, particularly attitude surveys involving a censusof staff views, can put a great deal of strain on internal resources. Indeed,such surveys often take place when the organization is already underpressure, if it is in transition and undergoing a major change programme.Using an external agency can reduce this additional burden on resourcesand allow the company to concentrate on its core activities.

This benefit will be especially felt where the organization has limitedor possibly zero experience of conducting such research. However, it israre for an organization to outsource the entire operation of a survey;indeed internal ownership is frequently marked by the establishment ofa network of coordinators charged with the responsibility for the suc-cessful implementation of the survey in their area. Such a network willbenefit from training in these additional responsibilities, and this trainingcan usefully be administered by experienced personnel provided by theexternal supplier.

Large-scale surveys, particularly those conducted using paper ques-tionnaires, and to a lesser extent those conducted by phone or online, areheavy on administration, as for instance it is vital that everyone who isexpected to take part is given, and seen to be given, the opportunity toparticipate. The situation to avoid is one where individuals are not ableto take part purely as a result of poor administration, yet it is obvious tothem that all of their colleagues are participating in the study.

ExpertiseIn addition to providing resources in terms of people to handle certainaspects of a survey, external research specialists can also draw on theirspecific expertise of conducting such surveys. This expertise can rangefrom designing the most suitable research methodology for the organi-zation through to interpreting the results. Along the way it could involve


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the translation of the questionnaire into different languages or dialects,as well as the technical resource to set up and run an online survey.

Some suppliers offer the opportunity to compare results with othercompanies, providing a wider context for the interpretation of researchfindings. In turn this can lead to the provision of opportunities to sharebest practice with other clients the supplier has worked with.

Anonymity and confidentialityOne of the major facets underpinning the MRS Code of Conduct has beenthe protection of the anonymity of respondents in any market researchstudy. Occasionally, the respondents may wish for the end-client of astudy to know that it was them who made a particular contribution: forexample, if a customer has a dispute with a company that needs to beresolved. In such circumstances if, and only if, the respondent providesexplicit permission for his or her details to be divulged will the anonymityof the response be removed.

For employee surveys, anonymity is further strengthened by a provi-sion limiting the reporting of the results for a unit to those units where aminimum number of 10 people take part. Without such a safeguard, in asituation, say, where there were only five respondents, it might be pos-sible for someone in the organization to identify a given individual fromthe pattern of responses, with the effect of compromising that individual’sanonymity.

NEXT STEPS IN CONDUCTING AQUANTITATIVE STUDY

Up to this point, the guidance in this chapter is more or less equally asapplicable to qualitative research as it is to quantitative, since both benefitfrom a clarity of objectives, a commitment to action, guarantees ofanonymity for participants and so on. Indeed, the issues of resources andexpertise are probably even more critical in the case of qualitative re-search, as it requires a skill set that is less likely to be found outside acompany that specializes in research.

From this point the chapter will assume that the decision has beenmade in favour of a quantitative study (as opposed to one involvingqualitative research techniques) reflecting the need for numerical mea-surements. This in turn invokes the use of statistical analysis of theanswers and enables direct comparisons between sets of data (for exam-ple between groups of people and points in time). Almost by definition,quantitative research offers an approach best suited to covering largegroups of people.

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The remainder of this section now considers the next steps that un-dertaking a quantitative study will entail, starting with the all-importantquestionnaire.

Drawing up the questionnaireA number of factors need to be considered when deciding on question-naire wording and content. First and foremost will be the specific infor-mation objectives of the research, since any failure to address these willmean an opportunity missed and possibly a commitment broken. Occa-sionally the list of objectives can be over-long, with the consequence thatdoing justice to them all results in a questionnaire that is itself excessivelylong. In this situation an examination of all the objectives is required, andsome ordering of priorities so that agreement can be obtained to a short-ened list from all the parties concerned.

Previous sections have mentioned the need to reconcile the agendas ofthose responsible for the study and those completing the questionnaires.The inputs from the latter are most readily available if there have beensimilar studies conducted previously, in which respondents were able tocomment on the questionnaire itself. Alternatively, research can be un-dertaken specifically to obtain these inputs. Research of this type is likelyto be qualitative in nature so that the issues can be explored in depth, andis most beneficial when a quantitative study is being planned for the firsttime and the organization has a ‘blank sheet of paper’ for a questionnaire.Such research must also be distinguished from a pilot study (see later),which is normally conducted on a smaller scale with a questionnaire thatsimply needs to be fine-tuned.

As more organizations use research methods to gather the views ofemployees, the more likely it is that any one organization will have ex-isting research to draw upon in its efforts to decide upon the content of afresh study. Specifically where the organization is planning a further sur-vey of a similar nature to those conducted previously, it will be faced bythe need to balance keeping the questionnaire consistent with those usedin the past and updating it for any changing circumstances. In practice,both aims need to be met as there is little point in pretending that theworld has not changed or that there are not new and different priorities.Equally, in order to track the views of employees in a way that permitsrobust comparisons over time, it is critical that there is consistency in theline of questioning.

The next consideration concerns the desire for some form of externalbenchmarking. A previous chapter considered the principal merits of thisas an approach to or reason for conducting a survey. In addition to thesepoints there is the matter of how it relates specifically to the constructionof a questionnaire. The database of questions that the external suppliers


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have should be full of those that are tried and tested and devoid of anyambiguities. Assuming that the questions cover the ground the organi-zation is interested in, it can make sense to use a form of wording that hasproved successful elsewhere, irrespective of whether the data from otherorganizations is going to be available and comparisons made.

Different types of questionWhen drawing up a questionnaire there are certain types of question thatoffer specific benefits in maximizing the value to be derived from thestudy. It is not the intention here to offer comprehensive advice on writingquestionnaires as that warrants an entire book in its own right. Indeed,readers are encouraged to turn to Ian Brace’s authoritative QuestionnaireDesign (2004). This section instead concentrates on some issues relevantto lines of questioning that appear in employee opinion surveys.

Closed and open questionsThe simplest form of closed question is one to which the respondent isinvited to answer either ‘yes’ or ‘no’. This form plays a role in employeeopinion surveys, notably in connection with factual elements: for exam-ple, ‘Have you attended a training course in the last year?’ More commonin such surveys however is the type of question inviting respondents tochoose one of a number of ratings from a scale.

For example, presented with a statement such as ‘My manager listensto new ideas and suggestions,’ respondents might be asked to select oneof the following options: agree strongly, agree, neither agree nor disagree,disagree, disagree strongly. This type of question, which is closed in thesense that there are a given number of options for a response, is discussedin more detail below.

By contrast, an open question on this topic, in which respondents aregiven complete freedom to answer in any way they liked, could bephrased as follows: ‘How does your manager respond to new ideas andsuggestions?’ The breadth of possible answers is such that it is more dif-ficult to aggregate the responses from a large number of employees, incontrast to the common currency of the agree/disagree scale present inthe closed alternative. So using a closed question with a predeterminedscale of answers has the benefit of simplifying the process while also pro-viding a basis of consistency across groups of employees.

Open questions tend to be used more in surveys that are administeredby an interviewer. Here uses can include asking for a spontaneous or top-of-mind reaction; or as a follow-up question exploring a previous answerin more depth. Since many employee studies involve respondents com-pleting the questionnaire themselves, there tends to be less usage of openquestions. Without the prompting of an interviewer, most respondents

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will not go into much detail. Moreover, a self-completion questionnaireis not conducive to asking the equivalent questions to those frequentlyseen in interviewer-led consumer research, such as the spontaneous recallof a brand name or a product attribute. With a self-completion question-naire there is the danger that the ‘answers’ will be mentioned elsewhere,prompting respondents with potential answers that they might not havegiven spontaneously.

The most common use of an open question in employee research is atthe conclusion of a questionnaire. This generally allows respondents theopportunity to comment on any aspect of working life in the organization.Apart from anything else, it represents a very important safety valve thatcaters for any aspects not covered elsewhere in the study.

Questions using verbal rating scalesThe example above with an agree/disagree scale is of a form of ques-tioning referred to as a Likert scale, after Rensis Likert who first describedit in 1932. Typically there are the five points on the scale, although it isnot unknown to use seven points (adding agree/disagree very stronglyto either end). In theory, having more points in the scale means thatgreater discrimination can be extracted from the answers, although if theend points are too exacting there is little likelihood that anyone will selectthem.

Frequently respondents are invited to give reactions to statements us-ing other types of rating scales, which range from, say, very effective tonot very effective; very good to very poor; a lot to a little; one of the bestto one of the worst; or very committed to not at all committed. The keyrequirement is to match the rating scale to the statement. It is unlikely tomake sense to people if, say, they are asked to use a scale from very sat-isfied to very dissatisfied when responding to the statement ‘I am ade-quately trained to do my job’.

Varying the rating scales gives the additional benefit of breaking upthe questionnaire and making it more interesting to complete. Where aquestionnaire occupies several pages in the same format and layout, re-spondents can find it tedious and fall into a pattern of responses (such asalways ticking the left-hand column) which does not reflect their truefeelings.

Occasionally there is debate about the freedom respondents shouldbe granted to be non-committal in their answers. The option of ‘neitheragree nor disagree’ can be a legitimate answer, as people may not have astrong opinion one way or the other. It is also used on occasion to allowrespondents the option of ‘don’t know’, although it is probably better ifthe design presents that as a separate option. If the neutral/don’t know


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options are removed the respondent is forced to express a view one wayor the other.

However, if the requirement is to measure those expressing a positiveopinion (whether it is those agreeing with a positively worded statementlike ‘Everyone gets on well in this office’ or disagreeing with one that isnegatively worded like ‘Morale here is poor’), the need can be met by theway the information is reported. So it may be more appropriate to giverespondents the full range of options and simply report the percentageswho express a positive opinion. Indeed, just such an approach has becomesomething of a standard way to reduce large amounts of data from suchsurveys down to key indicators.

The differences between ‘me, we, (s)he and they’When a statement is included in a questionnaire, it can be phrased in avariety of ways including:

first person singular (‘I am motivated to perform to a high level’);first person plural (‘People in this department are motivated to per-form to a high level’);third person singular (‘Our manager motivates us to perform to a highlevel’);third person plural (‘The company motivates us to perform to a highlevel’).

Apart from any difficulties connected with comparing results over timeor between organizations when different statements appearing to coverthe same topic have been used, it is important to consider how the sameindividual may respond to each type of statement.

If the question is phrased personally, an individual is much more likelyto give an ‘acceptable’ or positive answer – for example, to say that he orshe is personally well motivated – because a negative answer would re-flect poorly on the individual as well as on those people involved inmotivating him or her. (This is not simply about motivation, as it couldapply to a statement about communication or training or anything else.)

In contrast, a ‘we’ statement such as the second one above gives therespondent licence to admit that, while he or she may be well motivated,there are several other people in the department who are not. The thirdstatement introduces an extra dimension with the involvement of a thirdparty, in this case the manager. However intrinsically motivated thegroup of individuals in the department may be, the manager can of coursehave an enormous impact, either positively or negatively.

The last statement takes matters one further step by talking about thecompany in more general terms. This then becomes a comment on the

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senior management and the ethos of the organization, and it is much lesslikely that, by being inevitably removed from the day-to-day life of therespondent, senior management will be seen as having a significant rolein motivating employees.

There is therefore plenty of scope for apparently similarly wordedstatements to generate a diverse range of responses even from one re-spondent. While the selection of the particular form of question willdepend on the objectives of the study, it is clearly important to be con-sistent in the form used across surveys and groups of similar questionsin any one survey. Otherwise it will only be possible to make superficialcomparisons between surveys where different forms of a statement havebeen used.

Designing the questionnaireThe appearance and layout of questionnaires can have a major influenceon both the response rate and the accuracy of results. Opinions differ overwhether question formats should be kept consistent throughout, to speedcompletion and minimize confusion about what is required, or varied instyle in order to hold the interest of respondents. As mentioned above,excessive consistency in the form of long lists of questions using the samescales can lead to boredom, as well as the danger that respondents willfollow a pattern in their answers.

It is of course desirable to get respondents to think about the answersthey are giving. This can be achieved by breaking up question areas intoshort sections and by varying the scales used for the answers. Within ashort section it is also possible to vary the line of questioning by mixingup positively and negatively worded statements. In contrast, inserting anegative statement in a long list of positively worded statements runs therisk that the respondent will read it as a positive one and give an answeropposite to the one intended.

Another rationale for mixing positively and negatively worded ques-tions, in addition to getting respondents to stop and think about theiranswers, is that it allows an element of checking on the consistency in theviews they express. While this has some merit, it is important to limit thenumber of times this is done in the same questionnaire, as it will becomeevident to respondents that the author of the questionnaire is more con-cerned with verifying their responses than ascertaining their views.Again the consequence of this perception will be that many respondentswill decline to complete the task.

A further consideration in the presentation of a questionnaire is the useof graphics, and particularly logos and branding. Some organizationsspecifically develop branding of their employee surveys as part of the


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reinforcement process, to aid identification of related communicationmaterials and to build the engagement with the process.

Overall, a questionnaire that is attractively presented, with the ques-tions split into meaningful sections and asked in a way that is relevant torespondents, will contribute significantly to a successful study. And thebest way of assessing whether this is the case in advance is to pilot thequestionnaire.

Piloting the questionnaireOnce the questionnaire has been developed, it is essential to test itamongst a cross-section of employees to ensure that it is user-friendly,and that all the questions are comprehensible, unambiguous and rele-vant. A pilot exercise will normally involve a qualitative approach as itwill be more beneficial to obtain thoughts about the questions that workand are relevant, the questions that are neither of these things, as well asany questions that should be included but are not in the draft.

CASE STUDY

Cadbury Schweppes wished to adopt common systems and pro-cesses throughout all of its subsidiary companies across GreatBritain and Ireland. One business unit was chosen as the locationfor the initial implementation phase. There was therefore a clearintention to learn lessons from this one site before rolling out thesystems and processes to the rest of the region, and subsequentlythe other companies in the group.

The nature and the scale of the changes was guaranteed totouch all employees through quicker and improved decision mak-ing, improved processes, data flows and management informa-tion, leading to more rewarding and fulfilling roles for theemployees in the business. Since the changes were to the systemsand processes, there was also going to be a lot of data generated,from which the success of the exercise could be determined.

The one area of information that would not be delivered auto-matically related to the employees themselves. In particular it wasimportant to find out whether the changes were actually makingtheir jobs more rewarding and fulfilling, and if they were realizingthe benefits that were meant to accrue to them.

The situation was therefore one where it was going to be im-portant to devise a means of obtaining feedback from all em-ployees. It was also intended that regular measures would be taken

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over time, with the first coming fairly soon after implementation sothat employees could still accurately recall what their job had beenlike before the changes.

Given that there was no history or experience to draw on it wasespecially important that the development of the questionnaire forthis survey included a pilot stage to check that it was covering thecorrect areas in the right manner. A series of individual interviewsand a group discussion, drawing on a cross-section of employees,were used to find out how people felt about the changes and totake them through a first draft of the questionnaire. The strengthand uniformity of the views persuaded the management team todefer consulting through a wider study until a later date.

This was the reasoning behind the decision. While employeescould see the benefits of the changes that would ultimately accrue,in the immediate post-implementation phase their workloads in-volved were temporarily very high. The concerns this created weretherefore likely to colour any views gathered at this stage. By un-dertaking a quantitative study, and acting on reported concernsacross the workforce at this stage, the management team would ineffect be taking a false reading. They would therefore be in dangerin making unnecessary corrective action when the views of theemployees would in due course return to equilibrium as newworking patterns settled down.

Piloting of the questionnaire is also extremely important in an interna-tional study, when the questionnaire has to be translated into differentlanguages. The pilot will allow for the identification and correction ofdifferences in idiom and dialect which may not be familiar to the persondesigning or translating the questionnaire.

Employees can rightly be demanding of the standard of the commu-nications that they receive from the organization they work for. Particu-larly in the case of a self-completion questionnaire, with no interviewerintervention to correct the language used, any uncorrected errors will bevery visible.

Questionnaire completionThere are two main types of data collection method used in employeeresearch: interviewer-administered (either face to face or by telephone)and self-completion (whether individually or in groups, and either onpaper or screen).


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Interviewer-administered questionnairesWhile many consumers are taken through research questionnaires by aninterviewer, in employee research the most common method used is self-completion. The main benefits of this approach are speed and cost-effectiveness.

However, there is little point in spending less money if the informationyield is very low. Consequently, it can represent a good return on theinvestment to use interviewers. This could be the case, for example, inthose situations where it is important to gain an immediate or sponta-neous response to particular issues, or there is a need to use a complicatedform of questioning that cannot easily be catered for in a self-completionquestionnaire.

Trained interviewers are also particularly good at probing responsesand eliciting a deeper understanding of the reasons respondents feel asthey do about particular issues. Less common, but occasionally impor-tant, is the need to involve interviewers when elements of the workforcemay have problems with literacy or language, necessitating assistance inthe survey process.

In most cases interviewers tend to be used only when the number ofemployees involved in the research is relatively small. Again, this islargely an issue of economics, given the cost of employing an interviewingfield force large enough to cover all respondents in a substantial organi-zation. The economics are slightly improved when the interviewing isconducted over the phone.

Irrespective of the cost and time implications of using interviewers, itis also important to decide how these interviewers will be ‘positioned’:as part of the organization or part of an independent third party. Apartfrom the considerations about employing an independent agency set outabove, there is a further specific consideration of how it may affect theresponses.

Quite simply, although employees can sometimes be critical of theorganization they work for, they will tend to be less so when discussingthe matter externally. Comparable surveys have shown that when inter-views are deemed to be ‘within the family’ (that is, conducted by internalinterviewers) responses will be more critical than when the same ques-tions are asked by external interviewers. Similar behaviours can be ob-served outside a research context, when otherwise critical employees canbecome strong advocates when their employer is criticized by someoneelse.

Self-completion questionnairesTraditionally, self-completion questionnaires have been paper-based.There are a number of ways in which they can be distributed: by line

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managers (preferably accompanied by an explanatory briefing), by in-ternal mail, or even direct to employees’ home addresses. This flexibilityis important where the workforce is widely dispersed and increasingnumbers do not have a permanent work base: for example, with a peri-patetic sales force or the expanding numbers of workers basing them-selves at home.

Where the distribution of employees and the nature of their work makeit possible, group self-completion can be very successful in achieving ahigher response rate. An example of the sort of location where this cantake place is a canteen outside meal times. Employees are invited to attendon a phased basis so that each has sufficient space and time to completehis or her own questionnaire. Setting aside time during working hours tocomplete the task demonstrates to employees that the company takes thesurvey seriously. It can also help to shorten the elapsed time betweendistributing and collecting the completed questionnaires.

The importance of self-completion surveys in the conduct of employeesurveys has meant that the advent of e-mail and internet technology wasalways likely to have a significant impact. For this reason, the use of theseelectronic methods of undertaking studies is considered in a separatechapter (Chapter 6).

Census or sample?There are good arguments for conducting a census of all employees whenundertaking company-wide surveys. It demonstrates that the companyis interested in everyone’s views, avoids any problems concerning non-inclusion, and allows the production of actionable reports at localizedlevels. There are circumstances, however, where some form of selection(or sampling) may be sensible.

It can simply be the case that an organization is so vast, with employeesnumbered in hundreds of thousands, that it is impractical to address ev-eryone at once. Here the solution is more likely to lie in conductingsurveys within divisions or subsidiaries than genuine sampling acrossthe entire organization. However, true sampling has a role to play whensurveys are being repeated on a regular basis to track changing perspec-tives over time. Here it would be detrimental to continued participationif all staff were asked for their views too often without seeing any directbenefit. In addition, the whole purpose of sampling from a statistical per-spective is to replicate the views of the population without the need (andby implication the effort and expense) to ask everyone.

When a sampling approach has been chosen, selection should be ar-ranged to ensure that each sample represents a balanced cross-section ofthe whole to avoid skewed or unrepresentative data. This can be achievedeither by drawing a random sample or by setting quotas (a representative


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proportion of the whole according to sub-groups such as department, jobgrade, age, working locations). The latter is the more common method.Genuine random sampling requires the generation of a set of randomnumbers which are then used to select those asked to participate. In prac-tice it is more common to selecting every nth name from an alphabeticallist of employees.

CASE STUDY

When the retail bank NatWest chose to embark on a major cul-tural change programme across the entire organization, it de-ployed a range of communications media in support. Followingon from various launch events around the country, the impetus wasto be maintained through regular team briefings, videos and in-ternal publications. There was therefore a need to track progresstowards the goal of a transformation to a customer and results-oriented organization.

A sampling approach was therefore taken so that individualemployees were only occasionally asked to take part, limiting thescope for research fatigue. Equally importantly, the research,which was conducted by telephone (to maximize the value of someopen-ended questions and ensure that the questioning wentdeeper and probed whether real change had taken place) couldtake place without raising expectations of actions at each and ev-ery survey period, when it was primarily a vehicle for monitoringprogress.

Communicating the surveyPrior publicity is important to ensuring high rates of response. Any num-ber of media can be deployed to advise employees of the survey and itspurpose, ranging from in-house magazines to videos and posters as wellas e-mail and the intranet. It is recommended that this is reinforced withface-to-face briefings from line managers at the time the survey is dis-tributed.

Additionally, a letter from the chief executive (or other relevant personwith authority) sent prior to the survey, or accompanying the question-naire, can be very influential. This should signal the commitment of seniormanagement both to the survey process and to acting on the results of theresearch.

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As well as communication with employees at the outset, there shouldbe continuing communication throughout the research programme. Reg-ular updates will not only inform employees of progress and maintaininterest levels, they can also act as a reminder to those who have still totake part either because they have been away or simply not got aroundto it.

Ensuring high response ratesAs with the turn-out in a democratic election, it is self-evidently a goodthing that as many employees as possible take part in any study in whichthey are asked to participate. Where the response rate is low, the man-agement of the organization will have more difficulty determining theview of the workforce as a whole.

Beyond this, a study by Rogelberg et al (2000) demonstrated that em-ployees who do not respond to surveys are less satisfied and more likelyto resign than are employees who respond to attitude surveys. The resultsof this study, in conjunction with previous research, indicate that em-ployers should view a lack of complaints or a low response rate as a signof trouble rather than a sign that everything is going well. It is potentiallya situation where no news cannot be said to be good news.

Response rates can be affected by a number of factors which may bedifficult to influence because their origins lie elsewhere, such as generallevels of motivation in, and commitment to, the company. However, thereare steps that can be taken to improve rates of response, most of whichhave been touched upon in previous sections. These include the merits ofpublicizing the survey in advance, and ensuring that line managers arewell briefed, so that the importance of completing the survey is reinforcedamong their staff. Thereafter it should help if response rates are publi-cized during the survey completion period and a local system of surveycoordinators is arranged to encourage participation.

It will further assist if employees are assured of the survey’s confiden-tiality and the questionnaire has been piloted to ensure that it is relevantand user-friendly. Employees may also be persuaded to take part if thetime is provided during working hours for completion of the question-naire. Even where this is done, it is normally good practice to allow aperiod for completion of about three weeks, so that anyone who is awayfor reasons such as holiday, a business trip or short-term sickness still hasthe opportunity to take part on their return.

Generally in research there are debates about the merits of, and theneed for, incentivizing potential respondents by offering a tangible (typ-ically monetary) reward. In the case of employee research, especiallygiven the hope that employees are engaged in a dialogue, there is lessreason to think in these terms.


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The very closeness of the relationship between employer and em-ployee means that there should be much more direct benefit to an em-ployee arising from participating than is ever likely to be the case inresearch among customers. Indeed, rewarding individuals or groups di-rectly on the basis of response rates is open to abuse, with those whogenuinely do not wish to take part coming under undue pressure to doso. In some circumstances it may be appropriate to acknowledge a highlevel of response in a particular office or division, but the beneficiaryshould be a third party such as a charity.

Interest in the subject matter contained in the questionnaire is a verystrong motivator to take part. A good example comes from a bank thatwished to explore the attitudes of managers to the company car scheme.The study took place at a time when paper-based surveys were morecommon, and a sample of managers in the bank was sent a questionnaireprinted on blue paper. The response exceeded 100 per cent. Those whowere sent the questionnaire were motivated to respond by a subject thataroused stronger emotions than most. On top of this some of their col-leagues who did not receive a questionnaire, found out about it and tookcopies in order to submit their views. Unfortunately for them copierscontained white paper, so it was very easy to distinguish the responsesthat were solicited from those that were unsolicited.

Finally, one of the most common and certainly the most telling reasonsfor employees not completing a questionnaire is the belief that nothingwill change as a result of the survey. If response rates are low, ensuringthat some form of well-publicized action follows the survey will rekindleinterest in the process and result in an increased rate of response whenthe survey is repeated.

Analysing and reporting the resultsOnce the deadline for completion of the survey has passed, with the pos-sible addition of a period of grace to allow for any submissions arrivingby post, the in-house project team or external agency (as appropriate) hasthe responsibility of collating all the answers. This will then enable themto provide their clients with the outputs or deliverables that have beenagreed upon. Typically these consist of a report containing statistical ta-bles and a graphical presentation of key sets of data, along with acommentary on the findings and a management summary. The reportand particularly the graphics are frequently presented using the trafficlight style. Disappointing results will be presented in red, encouragingresults in green and anything else in orange or yellow.

While the ‘total’ results from a company-wide survey may be of greatinterest to senior managers and the HR department, most people’s inter-est will tend to be limited to their local region, department or business

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unit. If the results are to have an effect on the company at a local level,this localized data must be supplied. The only limit on this form of sub-analysis is confidentiality. A lower limit of 10 respondents for any sub-group should be agreed to ensure that no individual employee’s viewscan be identified.

However, it will be the responsibility of the organization’s manage-ment to add to this local data some reactions and thoughts about how anyof the issues raised in the research will be addressed. Subsequently, fur-ther reports should be distributed updating employees on progress withthese action items.

Local action planningIncreasingly, companies involve employees in formulating local plans ofaction in response to the survey results. This activity can usually be fa-cilitated by local managers, with support and guidance from the researchproject team. To ensure that the communications loop is complete, resul-tant action plans are typically circulated to more senior managers, bothfor their information and to gain appropriate authorization for localdecisions.

CASE STUDY

Manpower is a leading provider of employment services, and thegroup is comfortably in the top 200 of Fortune’s list of US com-panies and the top 500 globally, with an annual turnover in 2004of almost US $15 billion. Apart from the parent brand, the com-pany is made up of other well-known specialist providers such asBrook Street, Elan, Jefferson Wells and Right Management Con-sultants. It is therefore a real people business, which prides itselfon its commitment to employees and customers.

One of the things that has characterized the growth of the or-ganization is the entrepreneurial spirit whereby as well as growingby acquisition (hence the range of brands) Manpower has alsogrown organically by encouraging individuals to establish newbusinesses in different territories. As an example, the biggest mar-ketplace for the group is now France rather than the United States.

One of the consequences of this growth pattern has been thatthe individual country managers inevitably have a lot of autonomy.In addition the main form of group-wide communication tended torelate to financial and business performance. Jeff Joerres, whowas appointed as CEO and President in 1999, saw the opportu-nity of an employee survey to drive a global culture and to


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encourage people at all levels to communicate upwards. This latteraspect is given an additional importance as the structure of themainstream businesses often revolves around offices with a smallnumber of employees and little of a hierarchy between them andthe country managers, so there are not the channels for commu-nication that are seen in other large organizations.

The survey, entitled the Annual People Survey, run by RightManagement Consultants on behalf of the group, has now evolvedsuch that in its third year (2004) it encompassed all 27,000 em-ployees in the group and was conducted online. Although not allstaff have their own PC, those who do not received a paper invi-tation to participate using a dedicated terminal, and everyone wasgiven a unique link as a security measure and to avoid any abusesuch as completing multiple responses. The geographical cover-age of the group necessitated the translation of the questionnaire,to which local survey coordinators could add their own questions,into 26 languages.

Among the various uses of the data, a rating for ‘engagement’was devised, which was planned to be incorporated into balancedbusiness scorecards and used to determine an element of the com-pensation for senior executives. This rating is simple to calculateand easily understood: it is the proportion of employees in a cho-sen area who respond positively to all four key measures ofsatisfaction, motivation, employer advocacy and service/brandadvocacy.

To ensure that all of the results are fully utilized, the group hasan eight-step plan for effective action planning. This starts withcountry managers reviewing the results and then communicatingthe findings to all employees. In doing this the managers arecharged with identifying three priority areas that need to be ad-dressed. These priority areas are then explored in detail so thateffective solutions can be formulated, before the managers sign offthe preferred courses of action. These decisions can then be com-municated to all staff before the detailed planning takes places.Thereafter the implementation is subject to three-monthly reviews.

Survey frequencyIn addition to providing a regular communication channel between em-ployees and their managers, repeating surveys on a regular basis allowsthe company to build up an accurate picture of how the organization is

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developing over time. This is especially useful when goals are set andmonitored in relation to key indicators such as employee satisfaction,teamwork, communication and leadership.

As part of a two-way communication process, the main determinantof survey frequency should be the amount of time it takes for the resultsto be reported and acted on, and for any resulting benefits to be felt. It isalso important for the different types of survey that may be taking placethroughout an organization to be coordinated centrally to avoid surveyfatigue or redundancy. In addition, major employee surveys need to fitin with the business cycle of the organization. This needs to be taken intoaccount at the planning stage.

QUANTITATIVE STUDIES GENERALLYAs noted previously, quantitative research techniques can be applied tomuch more than the wide-ranging, traditional attitude/opinion survey.Yet the latter has to be accompanied by the disciplines set out above be-cause of its prominence, and the fact than it represents a form of com-munication to employees in its own right. By demonstrating howemployees and their views are valued it can be a powerful means of mo-tivating and energizing the workforce. Alternatively, if handled badly itcan have the opposite effect from that intended.

A one-off study involving a smaller sample of employees on a specificsubject inevitably does not have the same impact or carry the same levelsof risk and reward to the organization. Yet increasingly samples of em-ployees are being asked for their views on matters such as customer-related issues, product development, communications effectiveness andmuch more, and the results feed into business decision making just as thecustomer equivalent does.

The fact that these studies are likely to be more immediate and focuseddoes not mean that many of the principles of conducting employee re-search laid out above do not apply. While it is unlikely to be necessary tocommunicate to all staff prior to, during and after an ad hoc study, it isstill essential to have a clear project plan setting out agreed objectives,scope, the resources required and so on. For those employees invited toparticipate it will also still be important to communicate what the studyis about, what is expected from them and how the information will beused.

There is a natural appetite among those involved in such studies, aswith any other, to learn what the collective findings were, along with thedecisions made on the basis of that information. It is therefore good prac-tice to provide a summary covering these points to those who partici-pated. Subsequently all their colleagues may be informed as part of the


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normal pattern of internal communications when new initiatives and de-velopments are reported. When this happens, the simple fact that theviews of employees were obtained as part of the decision-making processis a valuable message in gaining support for the changes beingannounced.

CONCLUSIONSWhatever the subject matter of an employee survey, the potential benefitswill only be realized with careful planning and effective communication.In part this entails having complete management support and involve-ment, while it is also crucial to have effective project management skillsto ensure that the necessary detail is attended to.

It is also about having the requisite experience and skills so the resultsof any survey are used to maximum effect. For this reason it is likely thatthere will be benefits in drawing on research expertise from external sup-pliers, as few organizations conduct enough of this type of research tojustify retaining people with these skills permanently.

In particular the researcher’s toolkit will contain the knowledge nec-essary to design a meaningful questionnaire and to perform the relevantanalyses that will draw out conclusions that carry weight and be of valueto the organization.

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Internet ande-mail surveys

6

INTRODUCTIONThe impact that the internet and e-mail technology have had generallywill be evident to most people. One of the areas where the technology hasbeen deployed to great effect has been internal communications. In par-ticular the use of e-mail and intranets have greatly assisted the flow ofinformation to employees, and to a lesser extent opened up more oppor-tunities for the collation of information from them.

Market research in general has seen major developments attributableto the technology, ranging from data collation through to the reportingand dissemination of results. The possibilities opened by such new de-velopments and the benefits derived from them are considerable. Giventhat employee research represents a confluence of communication andresearch techniques, it was inevitable that the benefits brought by thetechnology to both should result in significant changes to the way inwhich employee research is conducted.

However, to avoid the risk that these developments might generatepractices that are detrimental to the spirit of market research, the MarketResearch Society has produced some guidelines relating to internet re-search. These guidelines provide a useful starting point for the chapter inthat they define what constitutes internet research. From this point thechapter goes on to consider the benefits of various approaches, and inparticular web-based methodologies.

With the use of the technology generally, new ways of doing thingsshould not be allowed to obscure some of the more fundamental princi-ples involved. It can be dangerous to assume that new approaches should

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be adopted in every situation. The chapter therefore also examines someof the specific considerations when undertaking employee research be-fore rounding off with the more general points as set out in the guidelines.

WHAT CONSTITUTES INTERNET RESEARCHThe MRS Guidelines on Internet Research act as a useful reminder of someof the key components of the MRS Code of Conduct as they relate to theobligations placed upon researchers when seeking the views and opin-ions of potential respondents. They are also very similar to the ethicalguidelines published by the Marketing Research Association in theUnited States and ESOMAR’s Guidelines on Conducting Marketing andOpinion Research Using the Internet.

The guidelines start by providing a description of what constitutes in-ternet research, and identify five categories. The first involves a respon-dent completing a questionnaire online via the internet regardless ofaccess route. The second entails downloading a questionnaire from aserver on the internet and returning it by e-mail. The next category dealswith the receipt of a questionnaire incorporated into an e-mail and re-turning it in the same way.

The fourth category relates to the participation in an online qualitativeinterview or discussion. Finally internet research is also deemed to in-clude taking part in a measurement system which tracks web usage usingspecialist software installed on the user’s computer.

Although monitoring of internet usage by employees is a fact of life inmany organizations and the subject of policies which have become partof the terms and conditions of employment, this last category is less rel-evant to the scope of this book. In addition, the use of online methods forqualitative research is considered in Chapter 7.

This chapter is therefore concerned primarily with the use of e-mailand the internet in conducting quantitative research surveys. Whene-mail first became available many organizations gave employees use ofinternal e-mail facilities before they had access to the internet and externale-mail. At that time the internal e-mail capability assisted with the dis-tribution and return of questionnaires. Increasingly, e-mail is used forcommunicating with employees about a survey rather than as a channelof distribution for questionnaires.

Before going on to consider the broader benefits of web-based surveys,it is worth looking at the specific comparison between the alternatives ofan e-mail approach and one that is web-based, using either the internetor an intranet. It is also necessary to be clear about the terminology used.Although e-mail is included in the definition of internet research, since

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the questionnaire is not completed online it is only for the web-basedmedia of the internet and intranets that the online description is used.

E-MAIL, AN INTRANET OR THE INTERNET?When considering an employee survey most organizations seek to takeadvantage of the opportunities afforded by technology. In practice, thereis still a significant role to be played by paper questionnaires given theincomplete coverage of the relevant technology across many organiza-tions. Indeed surveys frequently use mixed methodologies to maximizecoverage of and participation by employees. However, the focus of thissection is on those routes that do not involve paper.

E-mailWith e-mail it is possible to advise people about a survey that is takingplace, direct them to complete it online or to download a copy; or attachthe questionnaire to the message itself. When e-mail is used in the latterway it represents a superior form of distributing questionnaires to em-ployees than the physical distribution required for paper questionnaires.

Also, in contrast to a web-based survey where it may not be immedi-ately apparent how big the questionnaire is, the use of e-mail and aquestionnaire as an attachment makes it clearer to recipients how muchof their time will be involved, because they can readily make an assess-ment of the document size.

However, using e-mail as the method of distribution for the question-naires relies on all recipients having the relevant software, and configu-ration of their machines such that the questionnaire can be viewed on-screen in the manner intended by the sender. It also assumes that theattachment is suitable to pass firewalls and security barriers.

As mentioned previously, e-mail is also a prominent means of advisingemployees about a survey that is taking place even if the questionnaire isnot attached to the message, but is to be accessed from a central server. Itis of course possible to use other broadcast media to inform employees,and it is recognized that not all organizations using e-mail have a cen-tralized database of e-mail addresses. However, increasingly the proba-bility is that any organization contemplating running a survey like thiswill have e-mail addresses for all relevant employees, making it a per-sonalized and more obvious route to go down.

The use of e-mail to communicate the details of the online survey canstreamline the process, as an operational hyperlink to the relevant site canbe inserted into the message so that the recipient is encouraged to visitthe site immediately (rather than just directing respondents to a web

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address that they have to copy or type in). Without an operational hy-perlink there is the possibility that the invitation will be put aside and notresponded to. The hyperlink can also be combined with a password, andthis brings other benefits which are discussed later.

When an employee is e-mailed a questionnaire there may be the optionof returning it as a paper document (in the post or to a central collectionpoint, much as would have been the case previously with paper ques-tionnaires). Alternatively, the questionnaire can be completed on-screenand reattached to an e-mail so that it can be returned for collation (pro-vided that other steps are taken such as checking for viruses). Whetherquestionnaires are printed off-line or returned via e-mail, the processingof all of the replies is likely to involve a third party keying in the responsesbefore any analysis can be undertaken. This adds to the timescales beforeaction can be taken and presentations made.

Intranets and the internetThe advantages of web-based surveys, using either the internet or an in-tranet, relate to the technology and the opportunities it creates. Forinstance it opens up the possibility of using pop-up questionnaires evenif these tend to be deployed in studies that are more immediate and lim-ited in their ambitions. If a pop-up questionnaire is too long there will befew employees who complete it there and then.

In the same way that questionnaires e-mailed as attachments may notbe seen consistently by all recipients if they possess different versions ofthe software, the full exploitation of the capabilities available when usingthe internet alternative depends on respondents having compatiblebrowsers on their PCs or laptops. This is also true of operating systems,since one member of staff who has, say, Windows 95 may see the docu-ment quite differently from another with Windows NT. In the planningstage consideration needs to be given to designing the questionnaire inkeeping with the lowest common standard.

When questionnaires are completed by respondents visiting a dedi-cated intranet or internet site, the relevant server will have the necessarysoftware to aggregate the responses and produce instantaneous outputsfor analysis, in contrast to the e-mail alternative. There are other benefitsof the web-based approach, notably relating to the design of the ques-tionnaire, but these aspects warrant a more expansive discussion whichcan be found later in the chapter.

The choice between using the internet or an intranet is largely aboutaccess. There are sensitivities in some organizations about giving em-ployees access to the worldwide web. In practice the solution can be assimple as opening up the access to the one internet site that is hosting the

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survey so that the benefits of it being run by an independent organization(with specialist expertise and appropriate software) are realized.

Where fewer people have access to the internet than an intranet, a de-cision may be taken to install survey software on an internal shared drivespecifically for the purpose. This can raise a significant issue regardingthe perception of anonymity and confidentiality. If there are concerns thatthe data for individuals will be viewed by others working in the sameorganization, the response rate may be adversely affected. Similarly,when employees are asked to e-mail back completed questionnaires itwill be evident who they have come from, and this again may raise thequestion of who will see the completed surveys.

A further benefit of using an internet site to collate responses, as op-posed to a company intranet, is that those employees who are not office-based (because they are peripatetic or home-based, for instance) are morelikely to have access to the internet than an intranet, which is usuallyrestricted to office-based employees. Use of the internet (rather than in-tranet) also allows employees the option of completing the questionnaireoutside the office environment, which may be an uncomfortable locationin which to complete the survey, surrounded as employees are by col-leagues and managers about whom they may be asked to comment.

By directing employees to a server or website to complete a question-naire, rather than e-mailing it directly to them, it is possible, for examplethrough the use of passwords, to ensure that each individual only com-pletes one return. The completion of multiple questionnaires can be aparticular problem in organizations where the results of employee re-search are linked to performance reviews or bonuses

ADVANTAGES OF WEB-BASED SURVEYSSimply taking the above points into account, the preferred option wouldappear to be a combination of e-mail as a means of communication andthe internet for the completion and collation of responses. Yet, providedit is an option that is available, there are far more benefits to be gainedfrom a web-based solution.

Questionnaire designThe fact that the questionnaire for a survey is stored on a server in a singlelocation for respondents to access does bring potential design benefits.

Ease of amendmentFor a start, the design of the questionnaire can be modified right up untilthe last minute before it goes live (that is, when employees are expected

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to start completing it). Those responsible for running the systems aspectswill probably not want anyone to literally wait until the last minute, asinevitably there has to be checking and testing of the questionnaire beforeit goes live. Yet in contrast certainly to paper questionnaires which haveto be printed and physically distributed, there is clearly much more scopeto amend at a late stage.

Indeed, online questionnaires even offer the scope to include modifi-cations during the fieldwork period. In practice this will only assist withthose surveys on a more specific subject where learnings from early re-spondents (which can be analysed almost on a real-time basis) can beincorporated to enhance the value of the information derived from thosecompleting the questionnaire subsequently.

Modifying the questionnaire during fieldwork does not really workfor large-scale studies used to collect data about attitudes and opinions,where the aggregation of responses on a consistent basis is extremely im-portant, especially if the entire workforce is taking part. Since most peoplerespond immediately and it is important to coordinate the invitations toparticipate so that no one feels left out, there is little real scope for makingchanges in time for them to have an effect.

The flexibility in the design stage does however represent an oppor-tunity to be more imaginative in the layout of a questionnaire than ispossible in a more static medium. In many ways simply transferring apaper questionnaire onto screen represents a wasted opportunity. As anexample of the flexibility available, consider a section that contains anumber of statements respondents are asked to agree or disagree with.When a respondent expresses a strong opinion either way to one, or pos-sibly a sequence, of these statements an additional follow-up questioncould be inserted to probe the reasons for such views.

In contrast an attempt to achieve something similar with a paperquestionnaire requires the inclusion of follow-up questions at eachstatement in case either strong agreement or disagreement is expressed.If this is done there is the danger that respondents will become condi-tioned and avoid expressing an extreme view, since it will be clear thatthey have to answer more questions than if a moderate view is expressed.Moreover, the addition of follow-up questions on a paper version just incase they are required inevitably lengthens the questionnaire, possiblyunnecessarily.

Routing and rotationWhere a questionnaire requires respondents to answer specific questionsdepending on the answers given to combinations of previous questions,the instructions in a paper questionnaire can become quite complex.In addition, there is no guarantee that the respondent will follow these

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instructions precisely as required. The online equivalent routes respon-dents straight to the specific questions based on their previous answers.

Additionally, there are benefits to be gained from rotating the order ofsome questions or the way in which possible answers are presented. Inprevious chapters concerns were raised about such things as the ‘ordereffect’ or the danger of respondents going down one side of a scale. Withan online version it is clearly possible to rotate (and even randomize) theorder in which questions or statements appear, unlike a paper question-naire. And since there is not the need to squeeze as many questions ontoa page as possible, the online version can break up the statements orquestions so that each is presented as freshly as the last.

Layout and navigationIt would of course be possible to replicate a page of a paper questionnaireonscreen but it is preferable to minimize the amount of scrolling acrossor down the screen that a respondent has to do. A certain amount ofthis has to be allowed for since not all respondents will have the samesettings on their computer or the same screen size, yet it will help if thisis minimized.

Apart from limiting the number of questions that appear on eachscreen, another important consideration is the presentation of any scalesfor the respondent to select from. The combination of the question andthe scale will influence how many questions can be accommodated on ascreen at one time.

Space can also be saved through the use of drop-down boxes contain-ing the range of answer options. Of interest here is the evidence cited byBrace (2004), that the order of the scale in drop-down boxes (whetherstarting with the positive or negative end of the scale) has no effect on theresponses selected. This evidence applies to those boxes containing nomore than five responses, although it is acknowledged that the ordercould introduce an effect where the list is longer than five.

In addition to the layout of the questions, another aspect that deter-mines the flow of the questionnaire is the ease of navigation. If respon-dents are given the options to go backwards or forwards at any point(rather than relying on back/forward buttons on the browser) they willbe able to move smoothly through to the end. It is also important thatemployees are given the opportunity to break off from completing thequestionnaire, either to consider their answers or to deal with an urgentaspect of their job. This means storing their answers up to the point atwhich they terminate the session, and allowing them to pick up from thispoint when they have the opportunity to finish the exercise.

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Control and clarityWith an online questionnaire it is possible to ensure that all questions areanswered, by indicating to respondents that they need to supply an an-swer before moving on. In addition, respondents can be prevented fromgiving multiple answers where only one option is required. With a paperquestionnaire respondents might, say, amend their answer from agree todisagree, and it might not be obvious to the person processing thatquestionnaire which was intended. Online, such a change of mind isimmediately reflected by the over-riding of the first answer given.

The difficulties of reading some types of handwriting have also madeit more difficult to accommodate in paper questionnaires either openquestions or questions inviting respondents to enter numerical answers.Clearly these are difficulties that are not present when employees arekeying their answers in at a screen.

Another area in which the control available within the design andstructure of the online questionnaire can assist respondents is in the areaof demographics and classification questions. Large organizations needto be able to identify responses for broad groupings of employees suchas offices or divisions. This frequently requires employees to answer anumber of questions about where they work and how they fit in to theorganizational structure. Unfortunately, not everyone in the organizationwill be as familiar with the reporting lines as those who designed them,particularly if a recent reorganization has moved functions from onedivision to another. The questionnaire can therefore be set up to limit thechoices presented to any one respondent based on the information he orshe can readily give.

AssistanceApart from guiding respondents in the manner in which the question-naire is to be completed, use of the technology means that online helpscreens can be made available to assist with instructions on completingthe questionnaire, or with definitions and explanation of terms used. Forinstance, look-up tables can be used for questions dealing with the struc-ture of the organization, whilst FAQs (frequently asked questions) can bescripted to provide answers to the most likely queries. This in turn elim-inates the need for a help line which, in the case of large multinationalorganizations with employees completing the survey in different timezones, would otherwise have to be staffed 24 hours a day.

Progress reporting and remindersWith an online study it is very straightforward to identify how well thestudy is progressing in terms of response rates. In turn, this means that it

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is possible to send out general reminders if the response to date is disap-pointing, or to dispense with any planned reminders if the response isabove expectations. Where personal invitations to participate in the sur-vey have been issued there is the possibility of targeting reminders,although it may damage the notion that the survey is anonymous.

Interim analyses can readily be performed with an online survey, andthe full results can be available very soon after the deadline for completionhas passed. One of the prime reasons for this immediacy is that the ques-tionnaires do not have to be processed in the traditional sense, as this isdone automatically given the right software. In turn this eliminates someof the cost attached to conducting a survey. However, it only representsone facet of the study, so it would be wrong to expect vast reductions inthe price of a survey purely because it was moving from paper to online.There is also the danger of wasting time and effort in continually lookingat the data throughout the fieldwork period simply because it is possible.

One worthwhile piece of analysis that can be performed, which is notpossible with a paper questionnaire, is how long it typically takes foremployees to complete the exercise. While an indication of how long itshould take should be available from the planning stage and possibly apilot study, it may well be that certain groups find it more difficult thanothers. This represents a learning that can be taken forward to futurestudies.

Distribution of resultsIn the same way that the processing of online questionnaires facilitatesthe reporting of progress during the survey period, it also helps when thetime comes to report the results to all parts of the organization. The elim-ination of paper outputs means that it is much easier to provide data directto those who are interested, say by division or country, and to do so in atimely fashion.

That the data is available on a central server also opens up the possi-bility of the database being interrogated for ad hoc analyses. With suchpossibilities come responsibilities, since it would clearly be wrong forunauthorized people to have access to any data, or to be able to analysethe data at a level that threatened the confidentiality of individualresponses.

Multinational studiesThere are many organizations with employees in different countries,which require questionnaires to be translated and subsequently aggre-gated to show a global picture. A web-based approach can help minimizethe difficulties that sometimes arise with paper questionnaires at the

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translation stage, and also the overlay of results. In part this is a functionof the control that can be exercised centrally when conducting studies ofthis type. These advantages are over and above those logistical ones thatarise by virtue of not having to ship large amounts of paper around theworld, at either the distribution or collation stages.

Verbatim commentsIncreasingly as the proportion of employees who are comfortable usinga PC grows, it would appear that responses to open questions are fullerthan is the case with a paper questionnaire requiring handwritten re-sponses. With the further benefit that there are no difficulties in readingtyped responses, this is a particular area of strength for online surveysover a paper-based approach.

ISSUES FOR CONSIDERATIONNow we have considered the many benefits of online surveys, beforeautomatically assuming that it is the approach to be adopted in all cir-cumstances it is worth reflecting on some crucial issues that still have tobe borne in mind.

Communication/timescalesThe increased expectation of speed in turnaround of a survey can lead toa foreshortening of the timescales for the entire project, when the surveycompletion period is in fact only a part of a larger communication andengagement process. It therefore necessitates careful planning and a pro-gramme of communication that builds up to the survey itself.

Subsequently, and as a realization of any commitments offered inadvance, there needs to be full reporting and involvement in action plan-ning to determine what changes need to be implemented across theorganization as a consequence of the survey.

Access to/distribution of questionnairesA further danger arising from the above is that there can be pressure tolimit the period during which employees are given the opportunity tocomplete the questionnaire. This can sometimes mean that the availabilityof people is overlooked: adequate time needs to be allowed for peoplebeing on holiday, training courses and other absences which could leadto them being ‘disenfranchised’ by virtue of the survey period beinglimited to the time they are away from the office.

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Those who spend their days slaving over a PC also find it easy toassume that everyone has access to e-mail and the internet (and, indeed,that all those who do have a preference for completing a questionnaire ata PC as opposed to on paper). Yet there are large numbers of people, suchas those working in customer-facing roles in shops or bank branches, whodo not have such access. Even if they do, they may not be able to enterinformation about themselves in a manner that affords them the privacythey require or deserve.

With more and more people having access to a PC at home, it could besuggested that access in the office is not necessary. However it is impor-tant to give employees the choice whether they spend ‘their’ time com-pleting a survey. In addition, the organization may wish to demonstratethe importance of the exercise by allowing people to complete it incompany time.

One further provision that may have to be made concerns disabledemployees. It has always been appropriate to consider the use of inter-viewers to administer questionnaires to such employees. With theprogression to online surveys it is no less relevant to consider theinvolvement of interviewers or others who can assist them to complete aquestionnaire. Indeed, with the advent of legislation such as the 1995Disability Discrimination Act in the UK, the need to cater for disabledrespondents so they are not precluded from taking part has potential legalforce.

Confidentiality/independenceIn addition to the point about privacy above, perceptions of confidential-ity also arise with the hosting of the survey. Hosting on the website of athird party provides a similar reassurance to that obtained by providingreply-paid envelopes addressed to an external processor when paperquestionnaires are used. For many people there can be a perceived riskof others (including their superiors) finding out their views if the infor-mation is collated internally.

This is also relevant to the use of passwords, which confer some ben-efits in managing an online survey, but which can add to the perceptionthat an individual’s responses will not remain anonymous. It is possibletherefore, particularly when an online study is being conducted for thefirst time, that extra attention will need to be paid to reassuring those whomight have these concerns.

Ultimately this all comes back to doing what most market researcherswould do in the normal course of events, and that is thinking of the mostappropriate approach given the business needs and the nature of the in-formation required, rather than starting with a methodology and workingback from that.

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Proofreading and checkingAlthough web-based surveys have advantages of flexibility and imme-diacy, such benefits can introduce their own burden of care. Quite simply,what you see is not always what you want on screen. With a paper ques-tionnaire, it is possible to check it quite readily for errors, especially if anyrouting is involved. Yet online such checking entails going through thepermutations and combinations to ensure that all routes are correct andtake respondents to the expected destination.

The very fact that changes can be made readily, and even late on in theprocess, sometimes means that time is not allowed for the more exhaus-tive level of checking required, with the potential consequence of wastedeffort on the part of many respondents. It is therefore even more impor-tant that online surveys are piloted to identify any errors or flaws on thequestionnaire.

Passwords and personal invitationsMention has already been made of the use of passwords and personalinvitations to participate in a survey, as opposed to a blanket request forparticipation. Without some mechanism for controlling the participationof individuals, typically involving a unique user ID and password, thereis the danger of one person completing several questionnaires.

Personal invitations also offer real benefits to the employees them-selves, since they allow them to interrupt the process of completing theirquestionnaire and return some time later to the point at which they brokeoff. Without this means of identifying their incomplete responses theywould be required to start the process all over again. Also, if an incentiveis being offered, say a prize draw, it is necessary to find a means of iden-tifying those who took part.

However, as has also been noted such arrangements can give rise toconcerns about the anonymity of a person’s views, even though by thetime the data is examined the link with an individual may not be evident.Where this is likely to be an issue it is possible to provide for individualsto choose their own passwords, which by definition are not known toanyone else.

Security and back-upIt is essential for any organization to implement sound arrangements toensure the security and availability of data held on a computer system.The same principles apply to surveys in which employees are asked togive their views and opinions. Without adequate arrangements the datacan only be restored by repeating the exercise, with a probable loss of

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confidence from the workforce. Equally, with large numbers of employ-ees likely to be completing the questionnaires over an extended period,it is possible that more frequent back-up arrangements than normal willneed to be made to avoid the loss of data since the previous back-up.

MRS INTERNET RESEARCH GUIDELINESThe MRS guidelines are concerned with the more generally applicableobligations placed upon researchers as they relate to the gathering ofresponses online. They also go into detail on some specific issues, such asthose raised by research amongst children, which are not immediatelyrelevant to this book. The following extracts highlight the more generalprinciples behind conducting internet research.

Cooperation is voluntaryResearchers must avoid intruding unnecessarily on the privacy of inter-net respondents. Personal information (other than that already availablefrom other sources) must not be sought from, or about, respondents with-out their prior knowledge and agreement. In addition, researchers mustconform to any reasonable requests from respondents to delete data col-lected via internet surveys.

Respondents must not be inconveniencedWhere visitors to a particular website are asked to take part in a survey,either by clicking through to a survey site or via a pop-up window, careshould be taken to ensure that those who do not wish to take part caneasily exit or delete the survey. Respondents who have refused or com-pleted a questionnaire must not be re-presented with the same survey forcompletion.

For internet surveys the likely length of the interview and thus thelikely time commitment from respondents must be explained clearly. Re-spondents must not be deliberately misled regarding the likely timecommitment. For non-pop-up internet surveys it should be made clearthat respondents can complete the research at a time convenient to them,within the schedule dictated by the timeframe of the study.

Respondents should be given the opportunity to give a consideredresponse (for example, to amend responses where necessary) and use‘don’t know’ or ‘not applicable’ responses where appropriate. At the endof the questionnaire or project, researchers should provide a thank-youstatement or send an electronic thank-you letter, unless respondents haverefused e-mail contact.

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Respondents must give their informed consentA description of the nature of the research must include the purpose ofthe survey (that is, market research), or, if the survey contains severaltopics, the broad variety of subject areas included in the questionnaire.

All the above information must be given at the start of the question-naire, as should any links to data protection or privacy policies. This willensure that should respondents fail to complete the questionnaire for anyreason, their rights are protected.

In obtaining consent, researchers must not mislead the respondentabout the nature of the research or the uses that will be made of the find-ings. It is however recognized that there are occasions on which, in orderto prevent biased responses, the purpose of the research cannot be dis-closed fully to respondents at the beginning of the interview. Theresearcher must avoid deceptive statements (which would be harmful orcreate a nuisance to the respondent), for example about the likely lengthof the interview or about the possibilities of being re-interviewed on alater occasion.

The researcher’s identity must be disclosedRespondents must be told the identity of the researcher/organizationconducting the research and/or the client carrying out the project, alongwith a contact name and e-mail address at which they can be contacted.This could include a hyperlink to the researcher’s home page for moreinformation.

The respondent’s anonymity must be safeguardedThe anonymity of respondents must be preserved unless they have giventheir informed consent for their details to be revealed. If respondents havegiven consent for data to be passed on in a form which allows them to bepersonally identified, the researcher must ensure that the information willonly be used for the purposes that it was collected (that is, market re-search). Researchers can give this assurance via terms and conditions,contracts and so on. No such personally identifiable information may beused for subsequent purposes without the informed consent of the re-spondents. If consent is not given, the respondent should be reassuredthat confidentiality will be strictly maintained.

A respondent’s e-mail address is personal data and must therefore betreated as such within the purpose of MRS Code of Conduct and dataprotection legislation.

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Safeguarding dataResearchers must post a privacy policy statement on their online site (in-cluding any restricted access survey sites). The policy statements shouldbe easy to find, easy to use and clearly written. Typically a statement setsout how any information gathered in a visit to the site will be used, andwhether this includes the use of ‘cookies’.

Researchers must offer respondents adequate security in the transmis-sion of sensitive data. Researchers must also ensure that any confidentialinformation provided to them by clients or others is protected (for exam-ple by a firewall or encryption) against unauthorized access.

Before personal data is sent over the internet to another country, re-searchers must check with the relevant authority (such as a data protec-tion regulator) that the data transfer is permissible. The recipient mayneed to provide safeguards necessary for the protection of the data, sincecertain countries do not have equivalent data protection legislation.

Researchers must adequately protect personal data collected or storedon websites or servers. Especially sensitive or valuable informationshould be protected by reliable encryption techniques.

If temporary storage of the personal data collected takes place on aserver that is operated by a third-party provider, the research agencymust place the provider under the obligation to take the necessary pre-cautions to ensure that third parties cannot access the data on the serveror during data transfer. Temporary storage of the collected data on theserver must be terminated at the earliest possible time.

Researchers must have adequate safeguards in place to ensure thatwhen e-mails are sent in batches the e-mail addresses of the respondentsare not revealed to other respondents. Clients must be fully informedabout the potential risk of posting details of confidential organization in-formation in internet questionnaires.

CONCLUSIONSEmployee surveys, especially those designed to engage whole organiza-tions in dialogue, have historically tended to be based on paper ques-tionnaires completed by the employees themselves. Such a methodologyhas lent itself very readily to a web-based approach.

The principal advantages of web-based questionnaires are by nowfairly obvious and well known. Not only does the technology permit moreflexibility and assist with a more rapid turnaround, it is also far easier tokeep track of how the survey is going during the fieldwork period. Inconjunction with the use of e-mail to communicate with employees

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(before, during and after the survey) online surveys represent a very ef-ficient and effective way of conducting such surveys.

However, it is essential that the requirements of any study dictate themethodology used and not the other way around. Moreover, the funda-mental principles of conducting an employee survey still have to beadhered to, while attention is paid to the implications that stem from theuse of the very technology that is bringing the benefits outlined.

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Qualitativeresearch

7

INTRODUCTIONAlthough arguably it forms a more youthful branch of research, qualita-tive techniques have matured to the point that there is now generalacceptance of their validity and the benefits of their use. In particular,whereas quantitative research offers measurement, qualitative researchis better equipped to provide explanations and understanding of whypeople do things, or the reasons for holding the beliefs and attitudes thatthey do.

This chapter therefore considers what qualitative research is and howit differs from quantitative research. Specifically it looks at the skill setrequired of a qualitative researcher, before going on to examine some ofthe issues specific to, and applications of, qualitative research amongstemployees.

The applications of qualitative research are considered under threemain headings: when it is undertaken prior to a quantitative study, fol-lowing a quantitative study, and independently of any quantification. Inaddition, those qualitative applications are considered that involve bothemployees and customers in the research, as well as any solely concernedwith employees.

SPECIFIC FEATURES OF QUALITATIVERESEARCH

Whereas quantitative research is steeped in such disciplines as statisticaltheory, qualitative research has its roots in the sciences of psychology

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and anthropology. It involves an approach that is more flexible thanthe structured questionnaire that underpins any quantification. Qualita-tive research is therefore concerned with exploring motivations andunderstanding attitudes, and how those attitudes influence behaviour.Through its inherent flexibility it also offers a medium that can fostercreativity and be used to stimulate and develop ideas and concepts.

Another substantial point of difference between the two broad forms ofresearch is that quantitative research usually seeks to represent the viewsof the universe or population under study. In the extreme this can involveconducting a census: that is, seeking to gather the views of everyone.Indeed, as explained in a previous chapter this approach is much morecommon in employee research than other categories of research becauseof the importance of being seen to involve everybody in an organizationand to give them all the opportunity to have their say. With most organ-izations the size of the workforce is such that it is a practical propositionto involve everyone, unlike other populations in research.

By contrast, because qualitative research is more about gaining an un-derstanding and explanation of issues, rather than the measurement ofsomething, it is more important to talk to enough people to obtain aspread of views, in the knowledge that there will be diminishing returnsin the opinions that can be put forward by speaking to additional people.Sometimes this is referred to as theoretical sampling saturation.

Essentially, the tenth person spoken to is not likely to add as many newpoints as it would have been open for the first, second or third person toadd. It is therefore feasible to identify a consensus of core views by speak-ing to a relatively small number of people. What is important in anemployee context is to represent the spread of views that may exist, say,from different functional areas, different regions, or different grades andlevels (managerial, supervisory, clerical and so on).

The toolkit available to the qualitative researcher includes techniquesthat involve observation of respondents’ behaviour, although the pre-dominant forms are the group discussion (sometimes referred to as afocus group) and the in-depth interview. Group discussions are typicallyformed by a moderator and six to eight respondents, which is the optimalsize to ensure that each respondent can contribute, while at the same timenot unduly extending the time taken up by the discussion (typically be-tween one and two hours).

One of the hallmarks of running a group discussion is the ability tobenefit from the dynamics that operate within the group. As with anygroup of people the interactions between the individuals that comprise itcan be positive or negative. The aim of the moderator is therefore to min-imize any possible disruption or adverse effects while maximizing thepositive interactions which allow individuals to build on the ideas and

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thought processes of others in the group. Indeed, during the course of thediscussions individuals may come to reappraise their own thoughts andcontribution in the light of comments made by others.

The size of a group discussion is variable, and the phrase ‘mini-group’has been coined to denote those with a smaller number of participants,say four or five. Meanwhile, larger and longer gatherings are likely to bestyled as ‘extended’ groups or even workshops, where the intent is stillthe same: to engage a group of people, to ascertain their views and todevelop thinking in a given area. The fundamental requirement, as em-bodied in the Market Research Society Code of Conduct, is that thoseagreeing to take part do so in full knowledge of what is expected of themand what will happen to the results from the research.

Following on from the point above about representing the spread ofopinions, in the group context it is crucial not to mix participants in sucha way that some may be inhibited by the presence of others. Although inconsumer research it does occasionally happen that ‘conflict groups’ arepurposely conducted to pit those with contrasting, even opposing, viewsagainst each other, such approaches clearly have to be handled extremelycarefully. In employee research there are other considerations that mustbe observed, not least because, unlike those who gather on a singleevening for a consumer group discussion, employees could be in frequentcontact with other participants following an employee group. Moreover,the most likely reason for inhibition is the presence of someone in au-thority over an individual (his or her manager or supervisor). Conse-quently employee group discussions tend to be made up of those fromcomparable levels across the organization.

As with group discussions, where there is not an absolute for the num-ber of participants, in-depth interviews do not always consist of a singlerespondent. The notions of paired or even triangular interviews were de-veloped largely to accommodate the juxtaposition of different perspec-tives. In consumer research paired interviews may be used to exploredecision making in a household by talking to, say, a married couple. Inbusiness, and among employees of a company, they could be used tobring together parties involved in different stages of a process with a viewto identifying ways in which that process could be improved. There is theadditional benefit of being able to cover more ground, on the basis thattwo people jointly would have a wider perspective than one.

Aside from such possibilities, depth interviews tend to be conductedon a one-to-one basis, and this highlights the contrast between interviewsconducted for the purposes of qualitative research and those completedas part of a quantitative study. Whereas a quantitative interview will fol-low a very structured questionnaire, qualitative research relies on adiscussion (or topic) guide. This guide in effect constitutes an agenda for

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the discussion or interview, which will have been agreed by the re-searcher and the person commissioning the research in advance. Yet it iscritical that the structure is flexible to accommodate the flow of thoughtsfrom the respondent. While the intention will always be to cover the entireagenda by the end of the interview, the order in which the topics are dealtwith, and the weight given to any one, have to reflect the relative impor-tance to the interviewee, rather than the presumption of the moderatoror the end-user of the research findings.

Irrespective of which technique is used, it is important to conduct suf-ficient interviews and/or groups for the understanding gained from themto grow and develop. The fact that the respondents themselves are influ-encing the agenda for the research means that the first interview or groupwill rarely be handled in an identical fashion to the last one. Some hy-potheses that may have been present in the initial phase of a project willhave been rejected, while fresh ones will have been explored and devel-oped. Moreover, this iterative aspect of qualitative research facilitates(and almost demands) a parallel iterative approach between the re-searcher and the commissioner of the research through a series of regularupdates. Failure to do so will mean that the client is unaware of, andunable to contribute to, the development of the thinking during the courseof the project.

THE SKILLS REQUIRED OF A QUALITATIVERESEARCHER

The above requirements dictate the need for the researcher moderatingthe discussion to be skilled in several ways. On the surface, running agroup discussion can appear to be no more arduous than chatting to afew acquaintances. However, for the research to be productive andachieve its aims the moderator needs to be able to do all of the things setout below.

The moderator must be able to readily involve and engage respon-dents. One and a half hours is not long to extract the views and opinionsof seven or eight people, so they need to be engaged rapidly. Those whoare familiar with Tuckman’s (1965) description of the development ofteams will appreciate that the stages of ‘forming, storming, norming andperforming’ need to be executed with speed within such a timescale. Themoderator therefore needs to be able to make respondents feel at easequickly and ensure that they contribute to the discussion.

Having engaged the participants, the moderator must chair the dis-cussion without imposing any personal views. Although moderators are‘in charge’ there is little point if they act as though chairing a meeting andproceed to communicate their own views at length when the main

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purpose is to find out what the respondents think. Clearly anyone mod-erating will have their own views and prejudices, but these have to be leftat the door when they enter the room to perform their role.

The chairing of the discussion demands that the views of all partici-pants are elicited whilst it is crucial that no individuals are allowed todominate the discussion. Intriguingly, in much employee research theefforts of the moderator may also have to be deployed in curtailing thediscussion at the end of the session, often to the dismay of those who mayhave doubted in advance that their employees would open up at all. Inthese situations it is possibly a reflection on the limited opportunities thatemployees otherwise have to air their views on life in the organization.

The operation of this safety valve, allowing employees to ‘let off steam’,can be critical to the process of engaging them in the discussion even ifthe subject matter is far removed from the agenda for it. The outputs canalso be reported back to the client as part of the broader understandingto be gained from the project, although it is important to manage theamount of time taken by this element of the discussion prior to movingon to the main agenda for the research.

As well as not coming with preconceived notions or prejudices, it isimportant that the moderator is seen as independent, both in giving par-ticipants freedom to speak up (something they may not do as readily ifthe moderator is known to them) and in the interpretation of their views.Typically therefore those undertaking qualitative research will be drawnfrom outside the organization. This being the case it is critical that anymoderators are briefed fully on the organization without in any way bi-asing their perspective. They need to understand the politics and thetensions that may exist between different areas of the organization so thatthey can allow for them and even deal with them if they are in danger ofdisrupting or distorting the discussion.

While the ability to analyse and interpret what is said is clearly a majorrequirement, it is equally important to take account of what is not said.Whether it is in the form of non-verbal signals (posture, gestures and soon) or simply what is left unsaid by respondents, the moderator needsto be able to gather all such inputs, as well as what is actually spoken,and analyse the totality of the responses. Although he was not specifi-cally talking about research, a very relevant quotation comes again fromPeter Drucker, who said ‘The most important thing in communication isto hear what isn’t being said.’

Lines of enquiry have to be developed, modified and closed off asthe conversation unfolds. The analytical abilities required are thereforeboth ‘active’ (in the sense of controlling the flow of the discussion as ithappens) and ‘reflective’ (making sense of the aggregated responses ofall participants at the end of the research). The premium placed on good


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analytical skills and judgement at the completion of the research is rein-forced by the fact that it has to be undertaken, by definition, without thesupport of hard, statistical evidence.

In many respects moderators are themselves role-playing, rangingfrom acting as spokespersons who represent various points of view tobeing chameleon-like, adapting their interventions to the flow of the dis-cussion. This may seem at odds with the need for objectivity (almost tothe point of transparency) but particularly where the discussion is beingused to stimulate ideas and develop concepts, it can require the moder-ator to put forward ideas (through the use of stimulus material such asconcept boards and other projective techniques) that the participantsneed to build on. It therefore becomes part of the engagement activity, asthe concepts are quite likely to be ones that the participants would havehad no reason to think about before attending the discussion.

At the conclusion of a qualitative stage of research, a moderator simi-larly has to display the dual skills of independence and advocacy. Whenreporting or presenting findings from the research, it is essential that heor she is seen to be neutral and objective in his/her assessment yet capableof being persuasive in recommending courses of action based on the re-search undertaken. The greatest danger in any such exercise is that theinformation gathered during the research process is not used and actedupon. The moderator therefore has a primary role in identifying the mostappropriate courses of action and then persuading those who commis-sioned the research to see those actions through.

ISSUES SPECIFIC TO QUALITATIVE RESEARCHAMONGST EMPLOYEES

It has already been noted above that there are considerations that have tobe borne in mind when conducting qualitative research amongst em-ployees, over and above those that might be observed in the conduct ofconsumer research. Hence the need to consider the composition of re-spondents in a group discussion so as to avoid, say, any inhibitions arisingfrom the presence of people from different levels in the organization’shierarchy.

Confidentiality and anonymityConcerns about the confidentiality of any opinions expressed have to berecognized and dealt with. Employees, even if they are not shareholdersin an organization, can have substantial personal investment in it. Indeed,setting aside other monetary benefits linked to the organization (such aspensions, bonuses, loans for property or vehicles) the cumulative value

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of a career, including the potential for further advancement, could beperceived as being in jeopardy if they are deemed to express views whichare not acceptable to others.

Someone who is attending a focus group as a customer of an organi-zation is risking little in expressing a critical opinion of that organization.Indeed, one of the virtues of market research is that it helps organizationsidentify where they need to make corrections and improve what theyoffer to existing and potential customers. By contrast, as can be seen bythe treatment of more publicized ‘whistleblowers’, organizations can eas-ily take against ‘one of their own’ who has the courage to point outshortcomings in their practices. A National Whistleblower Center survey(as reported on their website) of 200 random whistleblower reports madeto the Washington, DC-based watchdog group during 2002 found 49.5per cent reported that they were fired for blowing the whistle. And thesewere not trivial cases since over half of these respondents said they hadreported fraud or criminal practices.

It is therefore critical that employees are reassured of the confidential-ity of anything they may say in a focus group or depth interview. This ofcourse is particularly relevant when, as is common, a moderator or in-terviewer wishes to record groups (on tape or disk) for the purposes ofanalysis later. Few researchers are blessed with perfect recall, so the useof recordings permits an exhaustive analysis, ensuring that all views areaccorded due weight.

That said, it is imperative that permission to record is requested inadvance of the interview or discussion taking place, and if an employeedeclines then it will be necessary for the moderator to make notes of thediscussion or have a note-taker present. Whilst this is less satisfactoryfrom the researcher’s point of view, that should not be allowed to com-promise the integrity and confidentiality of the research process.

This in turn makes it highly unlikely that employee groups will berecorded on visual rather than audio media, as is often the case in con-sumer research. The use of video in consumer research is a powerfulmeans of demonstrating to decision makers how customers feel about anissue, and it is extremely unlikely that any one respondent would beknown to those executives being shown the video. In contrast, any em-ployee recorded on video would be readily identifiable and any guaran-tees of anonymity that they may have received would quickly be renderedworthless. For the same reason the practice of allowing observers to at-tend consumer groups cannot be replicated within an employee study.

Coverage of the researchThe composition of a group discussion may also have implications for theway in which certain topics are covered in the research. When individuals


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from, say, different backgrounds, with varying political (both internaland party-political) allegiances, are brought together it is possible thatsome discussions (for example, relating to equal opportunities) could getheated, again with the dangers of greater ‘fall-out’ than is ever likely froma similar sized gathering of respondents drawn from the general public.The key here lies not in the avoidance of such issues but in the anticipationof those that might excite. The necessary preparations can then be made,not least with the use of a skilled moderator.

Sensitivity over the topics to be discussed may also be pertinent inorganizations where large numbers of the workforce are represented bytrade unions. It represents good practice where unions are involved toinform them of plans for any research and to gain their commitment tothe process. Apart from anything else this makes it possible to allay anymisconceptions that could otherwise arise over whether the discussionsmight cut across more formal negotiations. In some respects the flexibilityand free-flowing nature of any group discussions (as opposed to the cer-tainty of a structured questionnaire) make it as important to engageunions in the qualitative research process as it is with a quantitative study.

A time and a placeSince group discussions can easily last for an hour and a half, and inter-views take up to an hour, it is important to consider whether they arescheduled to take place during or outside the working day. While it isstandard practice for consumer groups to take place during the evening,this reflects the fact that few people would be able or prepared to taketime off work to participate in such research. With employees, the situa-tion is virtually reversed in that they are less likely to want to spent timeof their own discussing work-related topics.

The point here is further complicated by the difficulties of thankingpeople for their participation in the same way as is traditional with con-sumer research: by means of a cash gift, vouchers or even goods such asa bottle of whisky. A practical dimension to this issue is that the tax au-thorities would regard these payments as taxable (as either pay or abenefit in kind). In addition, there is always a philosophical preferencefor having participants who are there by virtue of an interest in the subjectmatter rather than those who are attending as a means of increasing theirincome.

A solution that meets this need while avoiding the complications ofinvolving payroll departments and tax authorities is to hold the researchsessions over extended lunch breaks (and possibly outside work hours,provided the occasion is presented as an attractive event in its own right).It will be attractive if the subject matter under discussion is of interest,and potential respondents are made to feel they will be able to make a

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genuine contribution through their participation. It should also be enjoy-able; the location is crucial to this and the provision of food and refresh-ments will also help.

If the research is conducted after the working day there are generallymore possibilities for holding the sessions off-site. It has to be recognizedthat those with families or burdened with long working hours may bereluctant to become involved at this time. Where it can be arranged, par-ticipants are more likely to arrive free of some of the ‘baggage’ attachedto their job and be more open-minded on some of the issues to be dis-cussed. The optimal timing will vary according to the place of work. Inlarge conurbations, such as London, employees will arrive at work fromall points of the compass having commuted significant distances. In orderto facilitate their return home it is suggested that the timing of any re-search activity follows closely on the end of the normal working day.Elsewhere in the country, it may be appropriate to schedule the event forlater to allow employees, should they wish, to go home prior to recon-vening at a central point for the research.

The benefits of the above approach apply particularly to group dis-cussions, involving as they do a number of participants. The reasons forconducting interviews off-site are less compelling. Indeed, it is often thecase that more senior people are interviewed alone, and the demands ontheir time are such that it makes practical sense to talk to them in theiroffices. There will occasionally be compelling logistical reasons for hold-ing group discussions in the workplace. Even so attention needs to begiven to the location of the discussions. For instance, there may be ner-vousness on the part of some employees if the group is held in a meetingroom that is located in an area where their participation would be notedby other, possibly more senior colleagues.

Reporting backThe need to feed back the results, plus accompanying actions, arisingfrom any employee research is a message that bears repetition. Nowhereis the message more important than in qualitative research. By definitiona small proportion of the workforce will have participated at length in anexercise where they have been invited to contribute to the debate on issuesof significance to the organization.

The participation alone can be a very powerful form of motivation, asthe individuals concerned will derive a strong sense of involvement inthe decision-making process. However, this can easily backfire if the par-ticipants are left without any indication as to what will happen followingthe research. The perceived return on their investment of time and effortwill quickly become a loss if they are not informed how matters will betaken forward. Even a decision to take a contrary course of action to that


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recommended in the research can be accepted if it is accompanied by arationale. Complete silence on any decision making is likely to resultin reluctance on the part of those respondents to participate in futureactivities.

It is recognized that in certain instances the nature of the subject matterand the implications of the decisions will be such that all employees (andpossibly external audiences) should be advised simultaneously. Even so,it should be possible to explain this to those who took part, and theircontribution should certainly be recognized when the announcement isfinally made. Apart from demonstrating an appreciation of these contri-butions, this can also create a positive impression among the workforcegenerally.

The fact that employees will have taken part in the research on the basisthat their identities are not revealed to the employer inevitably requiresthat their contributions are recognized in a general way, such as througha communication to all employees. A more direct and targeted thank-youmessage can only be delivered by the external moderator, who can ar-range for a personalized communication without the recipients everbeing identified by those working for the organization.

APPLICATIONS OF QUALITATIVE RESEARCHAlthough there are clear differences, as outlined previously, betweenqualitative and quantitative research, the two are frequently used in tan-dem, providing the organization with the benefits that each can bring todecision making. This section therefore sets out the combination of waysin which they can be used and the benefits of so doing.

Prior to a quantitative studyOne of the great dangers of constructing a questionnaire for a quantitativestudy is to do so without any input from those who will be asked to com-plete it. Quite simply if the questions are irrelevant to, and do not addressthe issues of, respondents they will not want to complete it. It will havefailed to offer them any benefits or rationale for completion. To com-pound matters, there is the danger that the message communicated bythe organization to its employees will effectively be that their views arenot important and that the organization is only collecting data it regardsas important.

Examples of where this can occur in employee research are when thefocus of those commissioning the research is solely on the measurementof progress against some organizational objectives or some externalbenchmarks. This is not to say that such measurement should not beundertaken, rather that a balance needs to be struck. The opportunity for

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employees to express their own views about working in the organizationneeds to be given comparable weight to the information gathered fromemployees for the benefit of the organization. Ironically, the harmonyevident in a balanced questionnaire that serves both purposes well islikely to be found in an organization that has previously invested con-siderable time and effort in gathering the views of employees. The im-perative to conduct a preliminary stage of qualitative research is thereforelikely to be greatest in organizations without the culture or history ofcollating inputs from employees.

More specifically qualitative research can play a number of roles inadvance of a quantitative project. It can be a means of gathering ideas andissues, and of determining what is important to employees. The flexibilityand scope for creativity within qualitative disciplines is crucial here. Bycontrast, a quantitative questionnaire works well when it is offering re-spondents predetermined lists of issues or attributes to choose from or torank; it is less effective at gathering responses that are over and abovethose specifically requested.

The typical way in which the latter might be attempted in a quantitativeexercise, through the use of an open question in a self-completion ques-tionnaire (without the involvement of an interviewer), inevitably meansthat it lacks the prompting or stimulation that many people require. Inaddition, the motivation to spend additional time thinking about the is-sues involved may be lacking when respondents have been informed thatthe questionnaire will only take a few minutes of their time and they haveother things to get on with.

By contrast, involvement in a qualitative interview or group discussionwill have been set up as taking a given amount of time. Moreover, inher-ently, the presence of an interviewer or moderator can act as the catalystfor generating ideas and trawling below the superficial responses thatmight be given without further prompting. It can therefore generate awealth of suggestions for the issues that are important to employees, aswell as being used as a preliminary filter in those situations where it isnecessary to allocate some order of priority.

In addition to using qualitative research to set the ‘agenda’ of anyquestionnaire, another major role is in refining it. Prior knowledge and/or organizational requirements may have resulted in an agenda that isalready established. Here, in addition to assessing how well this com-pares with an agenda that employees would create themselves, it isimportant to check whether the way in which questions are posed is ap-propriate to that organization.

While there are dangers in taking questions created elsewhere andmodifying them (if the intention is to benchmark against other organiza-tions, a variation in the wording may invalidate the comparison) there is


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equally the danger of using language that is alien to the employees of anorganization. Every organization has its own culture and language (no-tably the use of acronyms and abbreviations) so the way in which ques-tions are phrased can be off-putting to potential respondents if it is not inkeeping with how such matters are normally expressed internally. Atworst, of course, the questions could be deemed as being irrelevant toemployees if they do not relate to their experience or perception of whatis important in their own organization.

Qualitative research is here being asked to play a role in piloting, asdiscussed in Chapter 5. Apart from any other consideration, it is worthremembering that a pilot study can be a particularly good investment. Alltoo often it is seen as time-consuming when those commissioning a majorstudy have their own views as to what should be covered in it. Yet as canbe seen from the Cadbury’s case study, a pilot study can end up with astrong rationale for saving the expenditure that would have been incurredif the full study went ahead.

Following a quantitative studyClassically, quantitative research is used for measurement, with variousstatistical techniques being deployed to examine causal relationships be-tween variables identified in the study. However, without the ability toforecast the results of any survey it is not possible to include all thosefactors that might have contributed to any result. Consequently, it is notalways the case that a full explanation can be interpreted from the dataalone.

Happily, qualitative research is particularly useful in determining theroot causes of behaviours and attitudes. For instance, a quantitative sur-vey may have identified that there are low levels of satisfaction and thatstress levels are high. Following this up with a qualitative exploration ofstress and the specific causes should make it possible to ascertain the un-derlying problems and to identify possible solutions.

In addition, it may well be that attitudes and behaviours vary betweendifferent types of employee. For instance, managers and non-managerialemployees may well have different expectations of and attitudes towardsthe organization they work for, by virtue of their length of associationwith, personal investment in or emotional attachment to that organiza-tion. By exploring the relevant issues with managers and non-managerialemployees in separate qualitative sessions, the differences of opinion canbe determined and if appropriate acted upon.

This in turn highlights another major way in which qualitative tech-niques may be used following a quantitative survey: to support actionplans and target setting. Once the issues arising from a survey and thereasons behind them have been identified, the next stage is to plan so that

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all of the issues requiring attention are dealt with. Since these issues havebeen identified with the input of the workforce, it makes eminent senseto continue that input through to its conclusion and issue resolution.

Again, the nature of group discussions or workshops, involving largernumbers of employees, is very well suited to generating ideas and solu-tions. The labels of workshops and group discussions may appear to beused interchangeably, and in many respects they both are broadly con-cerned with gathering inputs from employees with a view to implement-ing change. Without being overly concerned with definitions, it is worthreflecting on the distinctions between the two approaches so as not toperpetuate any confusion.

Workshops are more likely to be composed of people who are therebecause of the position in the organization, and therefore the viewpointor perspective that they represent. Indeed, it is possible that a workshopwill transcend different hierarchical levels, since the agenda is to findsolutions rather than express more personal views. The person chargedwith leading the workshop, although still likely to be independent (andhence impartial) of all participants, will act as a facilitator, ensuring thatthe inputs from different levels and areas are considered and weighedbefore conclusions are finally reached. If it acts in this way, the organi-zation is more likely to obtain the support of all groups as it movesforward, instead of imposing solutions that are not supported.

Consequently the parties attending the workshop are quite likely to goaway with specific responsibilities for actions that have been agreed.While this may also happen following a group discussion, the tasks givento such respondents are more likely to be a continuation of the process ofgathering knowledge rather than the implementation of decisions.

In essence, qualitative research in the form of group discussions isused to provide an understanding of the attitudes and motivations ofemployees, along with such things as the language that is employedwithin the organization. Workshops are more likely to be concerned withhelping the organization move forward in the light of the informationgathered from the research.

Independent of quantificationIt is sometimes the case (notably where a workforce is very small)that research amongst employees is done exclusively on a qualitativebasis, without any accompanying quantitative research. However, themain reason that so much qualitative research is conducted amongstemployees relates to the issues researched. In the same way that customerresearch is conducted across a wide spectrum of topics (from communi-cations, products and services, to packaging and design, and so on), whenemployees are the recipients of a communication, or benefit from the


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facilities afforded to them by the organization, there is a role for qualita-tive research in the development of these messages and services.

In addition, and as foreshadowed in Chapter 2, where employeesare an integral part of service delivery to the customers of an organiza-tion, it makes it eminently sensible to gather the views of both groupsin any research undertaken. This section therefore considers areas inwhich qualitative research is undertaken among both groups, before ex-amining those situations where employees are the primary audience inany research.

Qualitative research among both customers andemployeesThe spectrum of situations here ranges from those where employees aregenuinely customers of the organization in their own right, through tothose where they are ‘bystanders’, who could be affected by overhearingcommunications that are aimed at customers, but reflect on them and mayunwittingly impact on their self-regard.

Where employees are genuinely purchasers of an organization’s goodsand services they can have additional and beneficial insights and sug-gestions for the development of new offerings, or the refinement ofexisting ones. Since research of this type is largely a process of creativedevelopment, it is usually undertaken through the medium of qualitativeresearch in order to maximize the constructive dynamics of runninggroup discussions. Not only does the forum encourage the sparking ofideas between participants, it can also facilitate the evaluation of thoseideas. This can work at both the strategic level (perhaps looking at whichmarkets the organization has the potential to operate in) and the tacticallevel (developing and refining the detail of what is offered in a givenmarket), although there are dangers in attempting to do both in the samepiece of research, as neither would be explored in sufficient depth.

More commonly, research among employees will be conducted as partof customer research projects because they are an integral part of the in-teraction between customers and the employing organization. Most ser-vice industries, by definition, deliver their offerings through employees,and as a result the employees need to be ‘sold’ the service so they can inturn sell it to the end customer. Although the development of a new ser-vice might be to the satisfaction of customers, if there is an aspect of it thatis unattractive to employees the result could be a loss of business to theorganization. Such difficulties could easily arise from the way employeesare remunerated, with the consequence that they devote more time to thesales of services that offer higher incentives. If the new service does notfit the incentive scheme, this could affect its sales performance. Simply

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conducting research among customers (to whom the concept of the ser-vice is very appealing) would not reveal the actual cause of the lowvolume of sales.

To turn to overhearing, the typical situation in which this arises is inthe use of above-the-line or mass-media advertising, such as campaignsthat feature employees in advertising aimed primarily at customers. Sincethe development cycle for these campaigns is likely to involve the use ofqualitative research amongst existing and potential customers (for thestrategic development of the overall campaign as well as at the execu-tional level of individual advertisements) it represents very little in termsof additional expense to conduct some separate research at each stageamong employees. It would be ironic not to do this, for example if em-ployees are meant to be portrayed as the heroes of the campaign but noone bothers to ask any employees whether they regard themselves assuch.

For another example, take the retail sector and the large investmentsmade in the design of outlets. Clearly the design has to be attractive toconsumers, but it is also worth sparing a thought for those who have towork in that environment all day and every day. When banks belatedlyrecognized that their branches were indeed retail outlets, there was a rushto alter the layout and ambience of many branches, introducing suchthings as coffee bars and piped music. One December a bank decided toplay a limited selection of carols continuously. The customer responsewas very appreciative, but many staff soon sought to turn the music off,as listening to the same tape over and over again can be testing even forthe most ardent devotee.

Qualitative research amongst employees as theprimary audienceAs with customers there is a wide range of communications media thatcan be deployed to communicate internally. So, in the same way that re-search features prominently in the development of customer communi-cations, at both strategic and tactical levels, it makes sense to considersimilar approaches to the development of internal communication. Whilethe relationship between the expenditure on research and that on, say, anin-house publication (with spend registered in the thousands) is not ascompelling as it might be with external advertising (where the spend canbe registered in the millions), there are clearly risks associated with get-ting the communication wrong and alienating the workforce.

At the strategic level, employees could be convened in group discus-sions to consider the portfolio of communications media, to examine therelative effectiveness at achieving their aims and to explore areas in which


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information is considered to be lacking. More targeted research can thenbe used to assess the suitability of specific media to convey specific mes-sages, and to give guidance on the best way of executing this. Here it isimportant to consider the breadth of any research, as there can be con-siderable discrepancies in the way in which different parts of the organi-zation will respond to the same messages, and research can help identifyhow the communication should be tailored to take account of this.

Away from internal communications, employees can also be describedas users of services provided by their employer in the form of benefits.The development of these services warrants the same sort of input fromemployees that customers make through product development research.A particular case in point is the offering by employers of a ‘cafeteria’ ben-efit plan, whereby employees can select from a range of benefit options.This requires an approach akin to market segmentation, as differentgroups of employees (defined by gender or age, for instance) are likely toopt for different combinations. It is therefore essential that preparatorywork is done to identify the extent of the range required to meet the needsof the different groups.

For example Global Home Loans, the third-party mortgage adminis-trator, decided to introduce a new benefits scheme in stages. Extensivegroup discussions were held to ensure it was something that staff wantedand appreciated. A different application of qualitative research comesfrom the UK regulatory authorities, where one such body was anticipat-ing significant changes to its role (see below).

CASE STUDY

With the increasing priority given to pensions and associated is-sues, and the introduction of new pensions legislation, Opra (theOccupational Pensions Regulatory Authority) had to think aboutthe best way of transforming itself into the Pensions Regulator – themore flexible, proactive, risk-focused authority that was requiredto meet the new challenges. To this end, the HR team was to bereorganized in order to drive through changes in the workplaceand maintain staff commitment.

Opra commissioned KW Research, an experienced indepen-dent agency, to conduct a qualitative research project in orderto evaluate how staff viewed the HR changes that were goingon within the organization in preparation for the transition tothe Pensions Regulator. Three group discussions, six paired and17 in-depth interviews were convened by employee researchspecialists among a representative sample of management and

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staff, which included HR personnel; additionally, 26 other indi-viduals responded to the opportunity to comment via confidentialone-page questionnaires which were obtained from the intranetand, once completed, mailed direct to the research agency. Un-derstandably, research at this time was likely to be characterizedby some anxious and demotivated attitudes, with some strongviews emerging from the self-selected, self-completion onlinerespondents.

Recruitment to the in-depth sessions was carried out in Opra’sResearch Department, but the identity of participating respondentsremained absolutely confidential to all directorates, including theHR department. Respondents’ permission to tape record the ses-sions was gained at interview, and data thus obtained was subjectto the rigorous controls of the Data Protection Act, in strict accor-dance with the Market Research Society’s Code of Conduct and inkeeping with Opra’s union safeguards.

Research was required to explore reactions to the new HR ap-proach, determine expectations from each function, assess thepotential impact of the new approach, and establish future prior-ities for the HR team. The results were enlightening and extremelyvaluable. Despite the instability of their own positions, this intelli-gent and thoughtful workforce recognized the need for fundamen-tal organizational change, driven by forthcoming legislation, toimprove the service they offered to their clients – those working inthe pensions industry. Internal information was perceived to be ata premium, however, and this fuelled anxieties and concerns atthis key time. The new HR structure was conceptually appealing,but was seen to be at odds with the former philosophy of the de-partment, so a seismic shift was needed to change the culture.

More importantly, it emerged that the HR function and depart-ment represented a microcosm of the organization itself: if the HRdepartment could transform itself effectively to meet the standardsrequired by the new Pensions Regulator, then so could the wholeorganization. Implementation and communication were majorconcerns, and thus it was essential to draw up a schedule of actionsduring the final stage of research, which included a brainstormingday involving all HR personnel run by Kate Willis.

To monitor reactions to the transformation, an ongoing quan-titative assessment is to be scheduled annually.


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QUALITATIVE RESEARCH ONLINEThe case study on Opra includes a simple example of how qualitativefeedback can be supplemented by gathering views online. Chapter 6 out-lined more broadly the various forms of research that together constituteonline research. While there is little dispute about the opportunitiesopened up by the internet in the conduct of quantitative research, thereis less unanimity on the efficacy of conducting qualitative research online.

At one level the existence of a chat room on the internet is a demon-stration of a form of a discussion group. Chat rooms generally are notsubject to the careful selection and recruitment of participants that typi-fies formal research. Frequently they will not be subject to any form ofmoderation either. However, it is clear that one can conduct an exchangeof views between two or more people online.

What is lacking from such online exchanges is the ability to captureand interpret the non-verbal inputs that contribute so much to the mean-ing derived from traditional interviews and group discussions. In timethe quality of video-conferencing links will assist, although there will stillbe debate whether the interactions between individuals onscreen will beas powerful as those when they are gathered in the same room.

Where online discussions do readily assist is by doing away with theneed for transcribing. Traditional qualitative research has relied on tran-scripts of audio recordings to furnish the moderator with a completerecord of what was said. Since online participants are expressing theirviews freely (and quite possibly more honestly than they would do in thephysical presence of others) in text that is digitally captured, it means thatthe outputs can be transferred readily to sophisticated analytical toolsdesigned to assist with the interpretation of the language used.

When the communication is simply in the form of text it is of coursenecessary to be aware that some things that are written are much easierto misconstrue than when they are spoken. Against this, there will besituations when it is advantageous to extend the discussion over a longerperiod than is normally possible, even to several days. This can facilitatenew directions and interventions while retaining the involvement of agiven group of people, something that is unlikely to be possible with aconventional group discussion.

CONCLUSIONSBy its very nature, qualitative research has the potential to be moreflexible than quantitative research, and consequently treat matters in aholistic fashion that a more focused quantitative questionnaire cannot.

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It can therefore be used in a manner that facilitates discovery andunderstanding, with the advantage of doing so in an iterative fashion ashypotheses are developed and tested.

Ultimately, qualitative research, conducted either in conjunction witha quantitative survey or on its own, has the capacity to inform decisionmaking in a way that provides a rationale for action.

As with any other form of research there are fundamentals that needto be observed to ensure that the time and effort devoted to it are pro-ductive. Chief amongst these are the support and buy-in of senior man-agement and the feedback of any results and actions arising from theresearch.


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The advent ofemployee insight

8

INTRODUCTIONPrevious chapters have highlighted the importance of consideringemployee research in the broader context of communications taking placein an organization. This chapter is essentially recognition of the need tointegrate all of an organization’s sources of data and information aboutemployees, including that derived from employee research. As such it isa parallel development of the concept that has emerged in consumermarketing and research.

Among the marketing and market research fraternities the concept ofcustomer insight represents the need and desire to extract more value anddirection from information gathered, for the benefit of the business con-cerned. Interestingly, at the same time HR functions have become moreintegrated within and aligned to the management and business of theirorganizations.

In terms of remits, the market research and HR functions could becharacterized as being concerned traditionally with the opinions ofcustomers and employees respectively. Unfortunately, in too many in-stances this has meant that information about these two critical audienceshas been gathered in isolation and not harnessed for the benefit of theorganization.

This chapter therefore considers the different perspectives of thesefunctions, and argues for the need to maximize the collection andusage of data so that the organization achieves the goal of being moreinsightful about the current and potential contributions of the peoplewho work for it.

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THE EVOLUTION OF A DISCIPLINE – MRAlthough the Market Research Society in the UK has been running annualconferences for over half a century, it was not until the 1970s that papersabout research among employees began to feature. Indeed, it was notuntil 1996 that an entire session, consisting of three papers, was devotedto the subject of employee research.

Schlackman, Thornley and Vuillamy (1970) described a study involv-ing a relocation of offices, and the role research played in identifying theamenities employees hoped to have access to in their new surroundings.Then in 1973 Bob Worcester discussed the way in which employee re-search could be used to assist companies in raising the effectiveness oftheir dealings with external publics.

By the end of that decade, in his address to the 1979 ESOMAR Congresson Information for Management, Frank Teer was able to espouse the no-tion that the role of the information director was the logical successor tothat of the market research manager. He noted how market research roleshad broadened, taking in the employee and social dimensions over andabove the traditional ones of supporting the marketing function. Yet hewas still aware that more needed to be done to fully integrate the contri-bution of market research to the business in which it operated. In partic-ular, this necessitated a more strategic approach, akin to how the financedirector was contributing to decision making in ways in which a book-keeper never could or would.

More than a quarter of a century on, research functions in many orga-nizations have been remodelled as insight functions. As well as address-ing a broader range of issues, this has involved adopting a more inclusiveapproach to information sources, notably that emanating from customerdatabases.

CUSTOMER INSIGHTStone, Bond and Foss, in Consumer Insight (2004), and Wills and Williamsin ‘Insight as a strategic asset’ (also 2004), describe how insight is morethan a relabelling of the market research or customer database functions.While some organizations may well have jumped on the bandwagon andgiven such functions a new badge without any real change in behaviours,many others are clearly determined to realize genuine insights. This canbe achieved in two ways. First there are those ‘eureka’ moments or flashesof inspiration that can result in specific opportunities being created; andsuch moments can of course arrive after studying data and analysingresearch.

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However, the second and more germane definition is concerned withthe depth of knowledge and understanding of consumer markets thatfacilitates thinking, planning and decision making about those markets.This is therefore more about the attitudes and skill set of the individual,and arguably these should be finely tuned in all those involved in mar-keting. One manifestation of these attitudes and skills should be a desireto embrace, and an ability to make sense of, data from a panoply ofsources. This will of course include market research studies and customerdatabases, but should also encompass competitor intelligence, feedbackfrom the sales force and customer service teams, financial performance,and data about complaints from customers.

The resultant picture of the consumer emanating from this activityshould therefore cover, over and above the harder factual data of whatpeople buy, when and where they buy it, the ‘softer’ aspects taking in theinfluences on these decisions such as media activity, the actions of com-petitors, as well as customers’ experiences, aspirations and expectations.Given that not all sources of data will necessarily point in the samedirection, there is a premium on the ability to weigh the informationand make sense of it all by giving due emphasis to the more importantelements.

Given the diversity of information sources required to make up a com-plete picture, it is also inevitable that different functional areas in the sameorganization will be involved. In larger organizations sometimes the onething that is not in place is a structure for bringing this information to-gether. This is why it should be a more deep-rooted requirement thattranscends any structural issues within the organization; and so muchmore than a rebadging exercise for an existing function.

THE EVOLUTION OF A DISCIPLINE – HRBack in the 1970s HR (as it almost certainly was not called then) willprimarily be remembered for its involvement in industrial relations. Inthe UK, trade union membership peaked at 12.6 million people, or overhalf the working population (the figure is now less than a third). Thedecade had begun with the Industrial Relations Act of 1971, which wassubsequently repealed following a change of government and replacedby the Trade Union and Labour Relations Act of 1974. However, theclimate was such that unemployment rose to levels that were consideredunacceptable, and strike action by several major trade unions helpedbring down the Labour government in 1979 following the so-called‘winter of discontent’.

At the same time there were still HR functions that displayed signs ofbeing largely concerned with employee welfare. This was particularly

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true of service industries that still operated on the basis of offering careersfrom entry through to retirement. Indeed, in banking, at that time perhapsthe apotheosis (outside the public sector) of the lifetime career, the usualname was still the ‘staff department’, so even the graduation to ‘person-nel’ was yet to happen. Despite, and possibly because of, this the functionwas an extremely influential one, capable of either realizing or dashingemployees’ career aspirations.

Whichever characteristics the HR function displayed, from dispensingwelfare through to negotiating pay and conditions, the relationship be-tween the individual and the organization was weighted heavily towardsthe latter. Individuals were much more dependent on the organizationthan vice versa, as the concept of moving between employers was muchless developed than it has now become, and the psychological contractwas a quite different entity (see below).

By the 21st century many changes had occurred which transformedthe role and remit of what had become the HR (and sometimes humancapital or talent) function. Gone are the days of the paternalistic employer(except in smaller, independent businesses), where the personnel func-tion may have adopted the role of employee advocate. Equally, it is notenough for HR staff to just be legal and administrative experts, essentialthough these elements are given the increasing legislative burden onbusiness and the vital necessity of ensuring that the business has enoughpeople, all of whom get paid when they expect to be paid.

The HR function has also become much more aligned to the goals ofthe business, as the value of the resource that is represented by peoplehas become truly appreciated, and this has been happening at the sametime as the old psychological contracts that tied people into their em-ployer have been broken. Careers are clearly no longer cradle to grave,and employees operate in a way that is much closer to the model of thecustomer who picks and chooses where purchases are made. Loyalty isno longer something that can be taken for granted, but has to be earnedand maintained over the long term by virtue of the organization’s abilityto develop an offer that meets the continuing and changing needs of thecustomer or the employee.

BUSINESS GOALSIn some ways the notion of the HR function acting in a strategic fashionis simply good practice whereby it ensures that all of its policies andactivities are complementary or congruent. There is clearly little point inoffering a world-class package of benefits if the recruitment processes arenot in place to ensure that the best candidates become aware of this andare selected if they apply. Similarly the best-intentioned performance

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management and reward systems that focus on the individual can seri-ously frustrate aspirations to promote a team-based culture.

In order to take things to the next level, HR functions are seeking tooperate in such a way that they inform decision making and are notsimply the implementers of decisions made elsewhere. The constraints ofthe internal and external labour markets are taken into account whendetermining how the business will develop, and are not issues that arerealized belatedly after the strategy has been set.

THE PSYCHOLOGICAL CONTRACTThis phrase has been attributed to Chris Argyris, who first wrote aboutit in 1960 and sought to use it as a means of analysing employer andemployee expectations. A definition offered by Guest and Conway (2002)is ‘the perceptions of the two parties, employee and employer, of whattheir mutual obligations are towards each other’. It is therefore the sumof interactions which can predate the commencement of employment andwill almost certainly include a set of expectations established during therecruitment process. Thereafter the contract will evolve as further eventsunfold, promises are made (and kept or broken) and actions are taken.This will occur at the personal level, for example in appraisals, but canalso happen at a corporate level, such that a group of individuals or theentire organization is affected by a decision.

In contrast to the typical document presented as a contract ofemployment, which may end up being tested in a court or tribunal, thepsychological contract is not something that can be enforced legally. Fromthe viewpoint of the employer it is more of a guide to how employees areexpected to behave, in return for which they can expect certain things outof their employment.

As with consumer brands, trust is a very strong component of thecontract, and if damaged it requires a considerable effort to repair. Inaddition, other values such as consistency (over time as well as betweenindividuals) are extremely important, along with how the deal betweenemployee and employer is manifest or delivered in reality.

In a virtuous circle of trust and successful delivery it is to be expectedthat job satisfaction and commitment to the organization will rise. Con-versely, it can easily turn into a vicious circle as employees respond tofailures to deliver. Whether these are corporate or individual failures,they can lead to poor performance and even resignation. An example ofa break in the psychological contract at the corporate level that has oc-curred in several sectors has been the move away from lifetime careers.People who entered the organization on the expectation that they wouldremain there throughout their working lives can find themselves subject


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to potential redundancy at a time in their career when it might not bepossible to get a job elsewhere.

THE EMPLOYER BRANDIn the same way that the concept of a successful brand in marketing andbusiness embodies all manifestations and points of contact between acustomer or potential customer and that organization, so the same orga-nization should be managing in a cohesive manner all those points ofcontact that employees and prospective employees may have with it.

Simon Barrow succinctly summarized the employer brand concept in‘Understanding people at work – a new priority for researchers?’ (1996):

The employer brand consists of all those factors which affect how peoplefeel about their work. Physical factors like the conditions in which theywork, the location of their job, how they are paid, how they are managed,how they are assessed, trained and developed. What their peer group islike. How they feel about the organization and its aim.

In the same way that a successful consumer brand is built upon qualitiessuch as recognition, consistency and trust, the same is true of an employerbrand; it is simply that the ‘consumer’ of employment is buying a differenttype of package of goods and services from those supplied to the worldat large. In many respects the concept of the employer brand is in itself adevelopment from the psychological contract, representing an attempt tocodify it and be more specific about what the organization has to offeremployees.

EMPLOYEE INSIGHTWhat is particularly interesting about the concept of the employer brandis that it represents the coming together of the HR and marketing disci-plines. For so long HR simply looked after employee issues, almost inisolation, while marketing managed the customer dimension. Yet thegrowing importance of people to business success has assisted the real-ization that business policy and goals should be informed by HR as muchas HR is dictated by them. In turn, HR can benefit from the skills anddisciplines developed within the marketing arena, notably in communi-cation (to inform) and research and analysis (to learn from the workforce).

Many HR functions have long had large amounts of data about em-ployees. What they may not have had, as it would not previously havebeen considered a core skill, is the analytical expertise or indeed the

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technology to fully exploit this data. In addition, as with the developmentof customer insight, there has to be a desire to embrace a wide range ofdata sources, which again may not traditionally have been in the provinceof HR. In particular it is important to supplement the factual data heldabout people with information about attitudes, preferences and expecta-tions. This will not only assist in defining what the employment offershould be, but will help determine the way in which it should becommunicated.

So in the same way that consumer marketing techniques are deployedto increase brand loyalty, improve customer satisfaction and profitability,HR can seek to increase employee loyalty, improve employee satisfactionand efficiency through more effective use of resources. For example, theimprovement in satisfaction and loyalty should necessitate lower recruit-ment costs as turnover rates are reduced. Moreover the strength of theorganization’s image and reputation as an employer will make the taskof recruiting the best candidates that much easier.

In addition, if the employment proposition is integrated into the overallbrand strategy there should be a greater consistency between the offersto customers and to employees, with the additional benefits derived fromgreater customer satisfaction and loyalty.

HOW THIS INSIGHT HAPPENSAt the simplest, insights can be derived from intelligent analysis andinterpretation of single data sources. Beyond this the growing use ofcombinations of quantitative and qualitative research methodologies inemployee studies offers tremendous synergies, as the one helps informand explain the other. Previous chapters have discussed the merits andapplications of the two broad types of research. Yet the deeper under-standing of people comes from sensitive use of both, so that each providesthe contribution that is best suited to it.

Perhaps the biggest potential will be derived from combining theoutputs of research studies with data from other sources. Primarilywithin the HR function, but often elsewhere in an organization, such asin finance and line management, there is usually a wealth of data aboutindividuals, which if harnessed contributes towards a holistic viewof any one employee.

Even with all of the existing information aggregated to form a view ofan individual, there will still be relevant information that has not beencollected. An example of such information could be the leisure interestsof employees. Although not directly relevant to performance at work, itis the sort of information that helps to describe and understand the em-ployee as a person. As was noted in earlier chapters there are many


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employees who become involved in community activities because of apersonal interest and not as part of any formal programme sponsored bytheir employer. Knowledge of these activities could help the organizationto understand attitudes towards reward, career development and work-ing hours, for instance.

There are obviously implications if such additional data is not seen tobe central to the organization, not least in terms of the resources thatwould need to be devoted to collecting and storing it. Here research canhelp, as it may form part of a survey that feeds directly into a segmenta-tion analysis, or can be linked through data fusion techniques (see laterin this chapter).

Attention also needs to be paid to the prevailing data protection leg-islation. In the UK this means that the obligations that are pertinent arethose that require the data to be obtained for specified and lawful pur-poses; that the data should be adequate, relevant and not excessive forthese purposes; and that it should be accurate, kept up to date and notkept longer than is necessary.

Without contravening this legislation, or the confidence in which cer-tain information about an employee is held, it is important to considerthat frequently in their relationships with employees (as well as cus-tomers), organizations fail to demonstrate they possess knowledge aboutan individual which that individual believes the organization has. Henceefforts should be made to gather the information known about any em-ployee and to ensure that it is available to be used for the benefit of himor her.

In addition to the data that is recorded by an organization about anemployee as a person, a further source of insight comes from other peopleoutside the organization with whom employees interact on behalf of theiremployer, notably customers. Such feedback may be at the level of teamsrather than individuals, but it is still very informative if it helps substan-tiate the true value of an employee to an organization.

In essence there is a case for using a variation of the balancedbusiness scorecard approach (see Chapter 1) in assessing and developingindividual employees holistically. The learning and growth perspectiveis relevant to individuals’ capacity and desire to develop and hence theirpotential, while the business process perspective can be adaptedto deal with the efficiency and effectiveness of job performance. Eventhough not all employees will deal with external customers directly, thecustomer perspective can be populated by feedback gathered frominternal customers as well as a more general assessment of the indirectcontribution made to customer satisfaction. Although the financial per-spective may also sometimes be lacking measures such as the income orprofit directly attributable to an individual, it nevertheless is appropriate

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to consider the employment costs of individuals against the overallcontribution they make.

Before we discuss some of the other techniques used to generate in-sights that have not previously been covered in this book, it is appropriateto consider the development of HR information systems (HRIS) and theextent to which they can contribute to the body of knowledge held by anorganization about its workforce.

HR Information Systems (HRIS)The development of the HR function has gone hand in hand with an ex-ploitation of the potential of IT systems. Often HR systems had theirorigins in handling the payroll. These days it is more common to find thatthey not only handle broader aspects of reward but also take in sicknessand other absences, training and development, diversity and perfor-mance management.

As a study by the CIPD (2004) showed, the extent to which broaderaspects, such as expenses and communication, are part of an organiza-tion-wide system will depend on the integration of systems generallywithin an organization. Even though the average age of the systemscovered by the study was four years, only a quarter of the organizationsindicated that their HRIS was integrated in any way with their othersystems.

The principal benefits that organizations expected to gain from intro-ducing such systems were improving the quality of information, and thespeed at which it was made available. It was also deemed important thatthe system reduced the administrative burden on the HR department.Happily, for the majority of organizations these expectations had beenrealized.

Nevertheless there were significant numbers responding to the surveythat intended to target integration as a key requirement when existingsystems were scheduled to be developed or replaced. The primary reasonthat it had not happened already appeared to be concerned with prag-matic decisions about the timing and amount of expenditure, since feworganizations opt to introduce systems across different areas at thesame time. This then requires considerable effort and expense in aligningsystems after the event.

While the full integration of systems will facilitate the type of data-mining techniques used in consumer marketing to maximize the under-standing available to the organization, other research techniques andanalytical skills will continue to play a part in generating insights.


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Key driver analysisKey driver analysis uses linear regression techniques to assist in the in-terpretation of data. It has been used extensively in the analysis of resultsfrom surveys concerned with such matters as customer satisfaction. Theapproach has also been readily used in employee research, and as withany other application it requires data from a substantial and statisticallyrepresentative sample. The values given by the respondents to a measureof, say, job satisfaction are then treated as the dependent variable (inmathematical terms).

Those factors that might be expected to contribute towards variationsin the level of job satisfaction between different employees are classifiedas independent variables. In an employee survey the sort of factors thatmight be examined are opportunities for training and development,recognition, teamworking, openness and communication, and qualitiesexhibited by managers and supervisory staff.

The analysis that takes place ascribes weights or coefficients to theseindependent variables, from which those that have the greatest impactcan readily be determined. In addition the analysis will calculate the cu-mulative effect of all the independent variables. This is important toidentify whether the sum total of these variables explains a small or largefraction of the variations in job satisfaction, and hence whether there maybe other significant factors not included in the modelling. The process canalso eliminate any duplication between independent variables that arehighly correlated with each other and so do not add anything to the over-all explanation.

Although the techniques used to perform the analysis demand an un-derstanding of mathematics and statistics, the outputs can readily bepresented in a graphical form to highlight the impact and relative impor-tance of the variables analysed for a wider audience.

SegmentationSegmentation can take many forms and has long been used as a strategictool in marketing. Essentially it recognizes that not all customers are thesame, and it is more efficient to identify sub-groups whose needs andwants are homogeneous, though distinct from those of other segments.There is also an expectation that the different segments will respond todifferent communications specifically targeted at them.

In order for any approach to segmentation to be effective there aresome fundamental criteria that the segments need to meet. First of all thecharacteristics that define a segment must be readily identifiable and ca-pable of being measured. It will not be much help if it is not possible to

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collect the relevant information from people, or if the importance of thesegment that they represent cannot be measured in some way.

Once the size of a segment has been determined, it will only be worthpursuing if it is substantial and merits specific attention over and aboveanything that might be produced for the general population. This in turnassumes that there is adequate differentiation between segments, and thateach is capable of being reached through targeted communications.

There are a variety of ways in which a market can be segmented, andmost of these have their potential counterparts in employee studies. Themost common relate to demographics, which in consumer terms are pri-marily concerned with age or life-stage, socioeconomic class, level ofeducational achievement, location lived in and so on. In employeeterms age and/or length of service, grade or status and place of work(either physically or in an organizational structure chart) are the compa-rable factors which are frequently used in any analysis of attitudes andbehaviour.

The benefit of segmenting employees in these ways is that it is readilyachieved by gathering the relevant details as part of a survey and ensuringthat the specification of the outputs from the survey groups the responsesof each segment together. Comparisons between the segments can thenbe read from the data tables. The limitation of this approach is that it isprimarily descriptive of a situation, and leads only as far as suggestinghypotheses which then need to be tested, rather than providing explana-tions why a given result has occurred.

Consequently other forms of segmentation have been developed inconsumer markets that seek to go beyond description and explain why,for instance, people make the purchases they do. These forms of segmen-tation are therefore characterized by being based on the needs of con-sumers, the benefits they derive from the purchases they make, theirlifestyles and so on.

When considering the relationship between employee and employerthe equivalent analysis would help to explain why people choose the typeof work they do or the particular organization they work for. By way ofan example, it might be expected that those who wish to work for chari-table organizations do not expect relatively high salaries. An analysisdesigned to verify this would inevitably have to take in employees froma broad spectrum of organizations, and is probably beyond the resourcesof any single organization.

A further segmentation approach that is readily applicable within anorganization usually comes under the heading of attitudinal or psycho-graphics, as it is more concerned with psychological traits. As withsegmentations based on needs and benefits, there is recognition that peo-ple who, say, live in the same place or are the same age can hold quite


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different attitudes and/or behave quite differently. The segmentationtherefore seeks to identify the characteristics of those who hold similarviews, with the intention of meeting their particular requirements.

Since many employee opinion surveys already consist of a wealth ofattitudinal data, there is tremendous potential to undertake this sort ofanalysis. Typically, the approach combines the use of the statistical tech-niques called factor analysis and cluster analysis. The former identifiesthe broad attitude dimensions underlying the responses to the statementsin the questionnaire (for example, those statements respondents are askedto agree or disagree with).

In seeking to determine those factors that provide the greatest expla-nation for variations in attitudes held, it is possible that the process willgenerate alternative solutions, say, with varying numbers of factors inthem. Sound judgement is then required in selecting the solution to betaken forward since, as with any form of segmentation, it ultimately hasto make sense to those who are going to work with it.

Here it can be helpful to have undertaken some prior qualitative re-search in which the moderator has interviewed a cross-section of em-ployees and been able to generate hypotheses about potentially differentsegments based on the variations in attitudes held. Such inputs notonly provide a basis from which to select the appropriate solution, theyalso add colour and richness to the mathematical outputs of the factoranalysis.

Based on these outputs it is then possible to perform the cluster analysiswhich is used to identify those groups of respondents with shared atti-tudes. Again an element of judgement is required as, for instance, thenumber of clusters or groupings generated by the statistical procedurecould include one or more that represent very small proportions of theworkforce. Re-running the analysis to eliminate these may provide a so-lution that can be implemented more effectively even if it does notprovide the greatest mathematical separation.

Once robust clusters have been identified, it is then helpful to generateportraits of these employee types and label them so as to bring the seg-mentation ‘alive’. Although segments will never be as different as blackand white, it is still critical to identify the darker shades of grey by high-lighting more definite attitudes towards different topics, or other char-acteristics that are more evident in some than others. One of the dilemmashere is that the premise of the segmentation is that attitudes vary withindemographic categories; yet segments can be more recognizable if it ispossible to say that one is, say, older and another is younger, or one ismore likely to be found in a particular region or division.

However, even without the ability to describe segments based on at-titudes in a neat and tidy fashion, the organization still has information

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that supports the need to tailor its communications to different groups indifferent ways. To a certain extent, assuming that the communications arebroadcast, these groups will self-select those messages that resonate withthem.

CASE STUDY

An example of an organization that has undertaken this type ofanalysis is Tesco. A much admired company and readily acknowl-edged as the leading retailer in the UK (and increasingly in otherparts of the world), Tesco has built its success on its marketing skills.One particular example is the way in which it harnessed the powerof its customer database when it launched its loyalty card, theClubcard. Through the knowledge acquired in this way about theshopping habits of its customers it could pinpoint developmentsthat would increase their expenditure at its stores.

In addition, according to a report ‘Employee as customer:lessons from marketing and IT’ by Dr Mark Dorgan (2003), Tescohas analysed the demographics and preferences of its employeesacross stores and functions, and segmented them into five groups:‘want it all’, ‘work–life balancers’, ‘pleasure seekers’, ‘live to work’and ‘work to live’. These classifications recognize the different ex-pectations that employees have from a job or career at the com-pany. This means that Tesco can tailor the offer it makes, in termsof such things as the work environment, the hours of work, the payand benefits or the career paths.

This application of approaches to employees similar to thosepractised for the benefit of customers is typified by a quote fromDavid Fairhurst, Group Resourcing Director at Tesco. At a Recruit-ment Society event on 14 September 2004 (reported on Tesco’swebsite) he said that the ‘magic formula’ could be illustratedthrough the equation: L2 (c + e) + r = s + p. ‘That means: listeninga lot to our customers and employees plus responding accordinglyequals sales and profitability,’ he said.

To make the formula work, organizations must also learn toraise employee engagement through effective line leadership.Fairhurst went on to say that ‘Leadership is about treating peopleas individuals – treating your employees the same way you treatyour customers.’


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Data fusionIn contrast to the notion of integrating information systems, wherebyall of the data relating to one person is available at one point, data fusionseeks to combine the data about one person from multiple sources. Inconsumer marketing attempts are often made to combine customerdata held by the organization with data from a market research survey.More sophisticated attempts at fusion seek to populate a database bymatching records of similar rather than the same people, with the aim ofgenerating a larger dataset. In part this reflects the fact that samples inmarket research are often a small fraction of the size of internal customerdatabases.

With employee data, the total population is normally more manage-able, while often surveys are conducted among a high proportion ofthe total workforce. Therefore the concept of matching records for thesame person is more feasible, and this is therefore the concern of thissection.

It is recognized that fusing data records for employees, in the sameway as described above for customers, is not a straightforward matter.The primary limitation on such activities stems from the sensitivities re-garding confidentiality of information and the data protection legislation.It is of paramount importance that those being asked to take part in asurvey are made aware in advance what will happen to the informationthey provide. Therefore accessing such data after the survey and using itfor a different purpose such as fusion is not condoned.

In consumer research, there are further sensitivities such that the pro-cessing in any fusion exercise will be undertaken by the external researchcompany, so it is not possible for the client organization to access theinformation provided by the customers. Equally, the reverse may be truewith employee records, as there may be restrictions on what employeedata can be passed on to a third party by the employer.

Set against these sensitivities is the fact that for many organizations thedata they hold about employees is incomplete, and there is a lack of in-tegration between various systems holding the data that is known. Thereis therefore a role for research to supplement the known data, and con-sideration needs to be given to obtaining the necessary permissions andtaking the precautions required so that a full and thorough analysis canbe undertaken combining various data sources.

CONCLUSIONSThere is every indication that research among employees is now beingaccorded an importance that matches the importance of employees to an

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employer. As the employment balance becomes more even, so it becomescritical for an organization to have an understanding of its workforce thatmatches the understanding it has of its markets and customers.

Not only can research supplement the internal data sources about em-ployees, the skill set of researchers means that the analysis and interpre-tation of the combined information can yield genuine insights for thebenefit of all concerned.

This means that the full range of research techniques should be ex-ploited and harnessed, with the aim of enhancing the understanding thatany organization has of its workforce, their aspirations and expectations.


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Appendix 1:Information andConsultationRegulations

INTRODUCTIONLegislation around the world that is concerned with communicationbetween employers and employees tends to concentrate on the role ofrepresentatives, notably trade unions, and hence is more likely to applyto those who choose to be represented in this way. It is less commonto find legislation that is concerned with the relationship and communi-cations between an employer and the totality of the workforce engagedby that organization. The EU Directive dealing with Information andConsultation is one such piece of legislation, embracing the workforceirrespective of whether they are currently represented in any way.

It is therefore legislation that is strongly supported by those involvedwith representing workers, but it can also be seen to encourage what isarguably in any case good practice in consultation on matters affectingemployment in an organization. Consequently it is the type of legislationthat could well be enacted in other parts of the world following itsimplementation across the European Union.

Since the directive and the regulations that flow from it provide aframework for discussion between an organization and the workforce, ittouches on many aspects central to this book. Without seeking to be a

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definitive guide on the legislation (which warrants a book in its ownright), this discussion deals with the background, considers some of theformalities and then discusses those aspects of interest and relevance tothe broader context of communication within an organization. Specifi-cally the discussion points of interest are:

employees and representatives;content of negotiated agreements;information and consultation;timing and frequency.

BACKGROUNDAlthough the ancestry of these regulations can be traced back muchfurther, the immediate origin is to be found in Directive 2002/14/EC ofthe European Parliament and of the Council of 11 March 2002. This soughtto establish a general framework for informing and consulting employeesin the European Union. These regulations are being implemented in GreatBritain in stages such that they have applied to the largest undertakings(those with 150-plus employees) since 6 April 2005. For undertakings withbetween 100 and 150 employees the regulations apply from April 2007;whilst in the case of the smallest undertakings covered (those with50-plus employees) the relevant date is April 2008. The definition of un-dertaking is generally regarded as one that is carrying out an economicactivity, but not necessarily for gain, so it can cover organizations in thepublic sector as well as those in the private sector. In terms of companies,the definition relates to legal entities rather than an organizational entitysuch as a division, unit or department, although it is possible for agree-ments to be established which reflect such organizational structures.

The intention of the regulations is to provide employees with rights tobe informed and consulted about the business they work for, includingthe prospects for employment, and substantial changes in work organi-zation or contractual relations. The requirement does not operate auto-matically. It is triggered either by a formal request from employees for aninformation and consultation agreement, or by employers starting thestatutory process themselves.

Essentially, the philosophy behind the regulations is concerned withimproving dialogue and promoting trust within undertakings. Theyshould make employees more aware of the pressures and situations thatcould impact on employment in the organization, and it is anticipatedthat as a result any adverse consequences can be offset and the employ-ability and adaptability of the workforce increased.

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The way in which the regulations have been drafted also allows aconsiderable degree of flexibility in interpretation on issues that may re-quire clarification by the courts or the Central Arbitration Committee (thepermanent independent body that adjudicates on disputes between tradeunions and employers and the operation of European Works Councils inGreat Britain).

Finally, it should be noted that the regulations supplement, and do notreplace, existing legislation. By way of an example, the procedures forhandling collective redundancies set out in the Trade Union and LabourRelations (Consolidation) Act 1992 apply irrespective of any agreementsreached under the Information and Consultation Regulations. These lat-ter agreements come with the shorthand description of ICE, standing forinformation and consultation of employees.

FORMALITIES AND SOME PARAMETERSThe flexibility that characterizes these regulations inevitably makes itmore difficult to encapsulate all of the steps and possible outcomes in asimple flowchart. The flowchart that follows therefore is not exhaustive,but is a schematic representation of the major issues facing organizationsas they approach the subject for the first time.The principal considerations are:

The capacity of either the employers or employees to initiate theprocess designed to lead to an agreement.A request from employees must be in writing and dated. The signifi-cance of the date is that it acts as the point of reference for the size ofthe workforce, and hence the number needed to be in support of therequest, as well as the timeframe for the process that follows.Whether there is a prior agreement that matches the obligationsimposed by the regulations.In the absence of such a ‘pre-existing’ agreement or an initiative by theemployers, the proportion of the workforce required to supportnegotiations that would lead to an agreement is 10 per cent.Where there is a pre-existing agreement, the proportion needed tosupport negotiations for a fresh agreement rises to 40 per cent.To be valid a pre-existing agreement must be in writing and not simplybe a matter of custom and practice.It must also cover all employees and have been approved, by meansof a ballot, through an expression supported by signatures, or theagreement of employee representatives acting on behalf of a majorityof the workforce.

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Is there a pre-existing agreement for consulting employees that meets the following criteria?

o It is in writing o It covers ALL employees o It has been approved by the

employees (eg by means of a ballot) o It sets out how information will be

communicated and how views will be

gathered

YES Threshold for % of the workforce needed to support fresh negotiations stands at 40% (plus majority voting if ballot held)

Threshold for % of the workforce needed to support negotiations is 10% (min. of 15 people but does not have to be more than 2,500)

NO

Without the required 40% mandate (demonstrated by ballot, signatures or the agreement of employee representatives acting on behalf of a majority of the workforce) or a move by the employers to initiate negotiations, the pre-existing agreement may stand for 3 years

No further action if 10% threshold not achieved

10% threshold achieved, or negotiations initiated by the employers

Within 3 months all employees must be able to participate in the appointment or election of Negotiating Representatives

Negotiating Representatives and employers to decide the following components of an Agreement which must be in writing and dated:

o Circumstances in which employees will be informed and consulted

o Provision of appointment or election of I&C Representatives OR for direct communication with all employees Failure to successfully negotiate

an agreement within 6 months results in the imposition of Standard Provisions

The negotiated agreement must cover all employees and be approved by them (eg in a ballot by at least

half of those voting)

40% threshold achieved, or negotiations initiated by the employers

Moratorium on requests for

negotiations lasting 3 years

Figure A1 Flowchart of considerations in approaching the Information andConsultation Regulations

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Finally, in keeping with the regulations the pre-existing agreementmust set out how the employer will provide information to and consultwith the workforce.

Interestingly, given the heritage of this legislation and the philosophybehind works councils, an agreement under the European Works Council(EWC) Directive is unlikely to be valid as a pre-existing agreement giventhat the focus of European Works Councils is on transnational issues.Indeed, the Information and Consultation Regulations have been de-scribed as the ‘national works council’ law to differentiate it from theEWC legislation.

The regulations provide for two types of representative. The first typecovers those that are appointed or elected to negotiate on behalf of theworkforce, once support for negotiations has been established. The sec-ond category will then act on behalf of the workforce under the terms ofthe agreement once it has been reached. The relevance of these represen-tatives is such that their position is considered in more detail later,although for the time being it is important to stress that the same peoplewill not necessarily fulfil both roles.

Another critical aspect concerns the time limits contained within theregulations. Once an agreement has been reached the principle is thatthere should be a three-year moratorium on requests to initiate the pro-cess again. The rationale for such a moratorium is that it prevents oneparty unilaterally seeking to unwind the agreement that was successfullynegotiated.

This area also provides a good example of the flexibility that has beenincorporated into the legislation, and how the mutual consent of employ-ers and employees can transcend what is prescribed in the regulations.Here, by agreement they can overturn the prescribed duration of a three-year moratorium and fresh negotiations can take place within a shortertimeframe. Similarly, if negotiations are taking longer than the nominalsix months this timeframe can be extended by mutual agreement.

Failure to negotiate an agreement can result in the imposition of theStandard Provisions contained in the Regulations. Not only would thismean the loss of flexibility over what can be contained in the agreement,it also affects other elements that might be included in it such as theelection of representatives.

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DISCUSSION POINTS

Employees and representatives

EmployeesAn apparently simple piece of information, the total number of employ-ees in the undertaking, is clearly an important reference point for theseregulations, in determining who is to be covered by an agreement or thenumber required to meet a threshold of support, for instance. Conse-quently there are specific provisions to ensure that requests to be in-formed of this are met, such that a request that is in writing and is datedmust be answered within one month.

The regulations provide a reminder, if any were necessary, of the con-tinuing absence of a firm definition of what constitutes an employee. Forthose who are considering any form of exercise whereby they wish toinvolve the workforce and are unclear who should be covered, here is areprise of the more successful tests devised by the courts over the years:

Does the person have to undertake the work personally? While a lim-ited power to substitute another person in his or her place has beenheld not to be necessarily incompatible with being an employee, themore freedom someone has to do so, the less likely he or she is to bean employee.What level of control does the employer have over the person?Although this test may not always fit the case of, say, skilled or pro-fessional people, when the employer might not have the necessaryexpertise to really control the workers and they are left to undertaketheir work as they see fit, generally it is deemed that the likelihood ofbeing an employee increases with the degree of control exercised bythe employer.Are there any other factors in the relationship which would be incom-patible with the contract being one of employment? Again this test isnot always conclusive but a good example relates to the use of equip-ment provided by the employer. Where people use their own equip-ment (such as tools and materials), the contract with the employer willseem less like one of employment.

When assessing the total number of employees, or deciding who to in-volve in a research or communications exercise, it would therefore beusual to exclude subcontractors as well as those such as temporary agencyworkers who typically do not have a contract of employment with theundertaking.

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Interestingly, for the purpose of counting the total number of employ-ees (and hence determining the size of the undertaking) part-time em-ployees can be counted as though they were full-time employees,although the employer may opt to count them as representing half a full-time employee if they worked under a contract for 75 hours or less in anymonth during the relevant period. However, when it comes to a ballot(for example to approve an agreement or elect a representative), part-timeemployees must be treated in an identical fashion to full-time employees.

Another stipulation regarding the total number of employees is that itis based on the average number of employees over the preceding12-month period. The impact of this can be seen in organizations involvedin seasonal activities, such that the total number employed at the time ofthe request would be significantly different from the average over theprevious year (arrived at by totalling the numbers employed each monthand dividing the total by 12).

RepresentativesUnder the regulations, as has been noted previously, there are two typesof employee representatives: those who negotiate the agreement that willcover how employees are informed and consulted, and those who act asinformation and consultation (I&C) representatives under the terms ofthe negotiated agreement.

Representatives involved in negotiating the agreement can be ap-pointed or elected, but all the employees of the undertaking are entitledto take part in such appointments or elections. In addition, during thesubsequent negotiations, all employees of the undertaking must be rep-resented. This in turn may influence the number of representatives,something that is not specified in the regulations.

As part of the agreement, as has been noted, there can be provision forinforming and consulting with the workforce directly. In practice, cer-tainly in larger organizations, there is likely to be a role for I&C repre-sentatives. The number of I&C representatives can be agreed by theparties, as can the method of appointment or election, along with thelength of time they will serve for and how they may be replaced.

The specification of the standard provisions is that the number of theserepresentatives should be proportional to the number of employees in theundertaking: one per 50 employees or part thereof, subject to a minimumof two representatives and a maximum of 25. In other words, this suggeststhat there should be two representatives for undertakings with 50 to 100employees, three for those with 101 to 150 employees and so on.

It is also worth adding that the number should reflect the diversity ofthe workforce. Apart from the geographic and demographic make-up,there could well be a number of different working practices (such as shift

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patterns of functional areas) that would make it appropriate for eachgroup to have its own representative.

Content of negotiated agreementsIt is explicit in the regulations that it is up to the employer and employeesto negotiate the content of the agreement that will govern how informa-tion is conveyed and consultation undertaken. However, the followingsection provides a useful checklist of what negotiated agreements couldcover.

The undertakings and the staff in those undertakings covered by theagreement, and whether different provisions apply to separate partsof the undertaking (for example individual establishments, divisionsor sections of the workforce) although collectively these separatearrangements must cover all the employees of the undertaking.The subject matter to be covered; how those subjects will be chosenand how agendas for meetings will be drawn up.The relationship between the agreement and any collective agree-ments that are in place with trade unions.The handling of matters governed by other requirements to informand consult the workforce (such as health and safety law and EuropeanWorks Councils), so as to avoid any unnecessary duplication of effort.The date and duration of the agreement.Methods, frequency and timing of information and consultation.Whether I&C representatives will be elected or appointed, or the em-ployer intends to inform and consult directly with employees (or acombination thereof), and how this will happen.The number of representatives and any obligations placed upon themto consult with and report back to employees; whether anyone otherthan an employee can be a representative.How the views and opinions of employees will be gathered, and whatthe employer will do in response to the expression of these views andopinions.The type and nature of information to be provided to employees andin addition when and how often information will be provided andconsultation will take place (for instance whether it will occur on dif-ferent levels such as local and regional as well as national).The methods for dealing with confidential or price-sensitive informa-tion; the obligations placed on those in receipt of such information andany disciplinary measures for those in breach of the obligations.The agreement must also contain procedures providing for the reso-lution of any disputes.

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The agreement, which must be in writing, should then be signed by aperson on behalf of the management of the company and approved bythe employees. The latter approval can be demonstrated by the documentbeing signed by all the negotiating representatives; or a majority of thenegotiating representatives, provided that it is seen to be supported byeither 50 per cent of all employees in writing or 50 per cent of those em-ployees voting in a ballot.

Information and consultationUnder the standard provisions of the regulations, information and con-sultation is deemed to embrace three principal categories.

Information on the recent and probable development ofthe undertaking’s or the establishment’s activities andeconomic situationUnlike the subsequent categories, there is no requirement to consult onthese topics, only to provide information on them. Indeed, there is norequirement for a meeting to take place during which the information isprovided. However a meeting might well be sensible in order to explainsome of the information, since it must be given in an ‘appropriate’ fashion,in particular to allow the representatives to conduct an adequate studyof it.

The intention is that the information assists in providing I&C repre-sentatives with the context in which decisions affecting employment,work organization and employees’ contractual relations will be made.The nature and extent of information provided under this heading shouldsensibly relate to the decisions that could be reached under the other twocategories which do involve consultation.

By starting with these latter categories, and focusing on those aspectsof the recent and probable development of the undertaking’s activitiesand economic situation that affect employment, work organization andemployees’ contractual relations within an individual organization, it willbe easier to determine which items of information should be provided.Again it is not possible to be prescriptive about such matters given thatthe factors that influence such outcomes will vary substantially from oneorganization to another.

To assist with the types of information that could be pertinent (wherethese developments are likely to affect employment within the under-taking, or lead to substantial changes in work organization or employees’contractual relations) it is first worth considering those that could relateto the undertaking’s activities. Here information could be concerned withproducts or services, launches, significant changes and discontinuations.

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Also pertinent will be changes in production capacity or sales levels, aswill developments in technology, production processes or ways ofworking.

Other aspects of probable interest will be restructuring plans,takeovers and mergers, acquisitions and disposals of parts of a businessor other assets, investment, and opening or closure of establishments(such as factories or outlets). Likewise reorganizations will be relevant,including a transfer of production or posts to different locations or dif-ferent divisions/units, as will changes to the undertaking’s aims, objec-tives, vision, mission statement, strategy, business plans or changes insenior management.

Turning to the undertaking’s economic situation, the type of informa-tion that is likely to be of interest here will be the competitive environ-ment, trading conditions, the outlook for the sector, the level of demand,and the state of the undertaking’s order book; along with the undertak-ing’s financial situation based on its accounts.

Information and consultation on the situation, structureand probable development of employment within theundertaking or establishment and on any anticipatorymeasures envisaged, in particular where there is a threatto employmentThe emphasis here is on the overall number of employees in the under-taking, both current and future levels. It would therefore include recruit-ment of additional employees and redundancies (whether voluntary orcompulsory), staff turnover, the possibility of moving to reduced hoursworking or the need for overtime, and could include changes in retire-ment policy or early retirement schemes.

Since it also includes the ‘structure’ of employment, this is understoodto mean how employees are distributed within the undertaking, for ex-ample, geographically at different establishments (plants, offices, facto-ries, retail outlets, branches), or organizationally within differentdivisions or units of the undertaking. It would therefore include a reor-ganization of posts within the undertaking, redeployment of staff, or atransfer of posts to different locations.

Meanwhile ‘anticipatory measures envisaged, in particular wherethere is a threat to employment’ are deemed to refer to employee trainingand skill development so as to increase the ‘employability and adaptabil-ity’ of affected employees. This suggests the employer should considerwhether the threat to employment can be offset through redeploying andperhaps retraining employees whose posts are under threat.

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Since this category concerns employment as a whole within theundertaking, it is not about individual posts or employees. It doesnot require information and consultation to take place on the recruit-ment, redundancy, dismissal, retirement, redeployment, training, devel-opment or transfer of an individual employee or of a small number ofemployees.

It is not possible to specify a lower limit in terms of the number ofemployees who would have to be affected as this will depend on thecircumstances of the individual case. Clearly, the more employees af-fected, and the greater the proportion of all the employees in the under-taking, the more likely it is to come within this category. A situation thatis likely to lead on to collective redundancies as defined by statute (thatis, 20 or more redundancies at one establishment) would be covered.

The purpose of consulting I&C representatives on the matters coveredby this category is to give them the opportunity to express their views onthe existing level and structure of employment within the undertaking,and its probable development, including possible recruitment or redun-dancies, and any plans to redeploy or retrain affected employees.

Information and consultation on decisions likely to lead tosubstantial changes in work organization or in contractualrelations, including those covered by the Communityprovisions referred to in Article 9(1) (the directives oncollective redundancies and business transfers)The EU Directive does not specify what the terms ‘work organization’ and‘contractual relations’ are meant to include, other than collective redun-dancies and business transfers. However, the Department of Trade andIndustry (DTI) has offered its views on what these phrases would include.

Regarding changes in work organization, it is felt that these wouldinclude changes in the level or distribution of employment within theundertaking, including redundancies, along with changes in policy onflexible working, part-time working and overtime. In addition a move toreduced hours or overtime working, and changes in shift working orother work patterns would also be covered.

Meanwhile changes in contractual relations would arise should therebe a new employer as a result of a transfer of the business, or part of thebusiness. Also relevant would be substantial changes in employees’ termsand conditions (including hours of work, leave entitlement, rest breaks)or the introduction of, or a change to, compulsory retirement age. Furtherchanges that would be covered include those to an occupational pensionscheme where there is a contractual right to participation in the scheme,as well as changes in disciplinary or grievance procedures. In the DTI’s

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view ‘changes in contractual relations’ would not cover changes in payor benefits that have a monetary value.

Overall, the context of the directive is about employment within theundertaking, and it is reasonable to infer that ‘contractual relations’ meanthe employer’s contractual relations with employees, rather than a busi-ness’s contracts with third parties. Since it concerns ‘substantial changes’in work organization or contractual relations, this is not about individualposts or employees. Consequently, as with the previous category, it doesnot cover the recruitment, terms and conditions, redundancy, dismissaland so on of an individual employee or of a small number of employees.

As with the previous category there will be some debate about thenumber of employees who would have to be affected, which, as ever, willdepend on the circumstances of the individual case. Clearly, the moreemployees affected, and the greater the proportion of all the employeesin the undertaking, the more likely it is to come within this category.

ConsultationGiven the importance of consultation, over and above the provision ofinformation, it is worth considering this in more detail. In general termsconsultation between an employer and employees should be beneficialin terms of the involvement that all parties have and the quality of thedecision making that ensues. That said, consultation is also somethingthat can be handled badly with adverse effects if expectations about whatcan be achieved are mismanaged and there are no discernible outcomes.

This is where the framework that the legislation seeks to provideshould be helpful. The regulations define consultation as ‘the exchangeof views and establishment of dialogue’ between the employer andrepresentatives.

Clearly, representatives are expected to be given information in sucha manner and such time that they are able to study and consider it inadvance of any consultation. These consultations must be an opportunityto express the views and opinions representatives have formed, in dis-cussions with the level of management and representation relevant to thesubject under discussion (that is, that part of the management team withthe authority to change the decision being consulted about). The repre-sentatives are then entitled to a reasoned response from the employer.

Indeed, consultation about the decisions referred to in the third cate-gory above (concerned with work organization and contractual relations)must be undertaken ‘with a view to reaching agreement’ if those decisionsare within the scope of the employer’s powers. Although this does notmean that there must be agreement on such decisions, it can be argued itis encouraging both parties to reach agreement.

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From case law in other contexts it is clear that the person consulting isnot obliged to adopt all or any of the views expressed by those beingconsulted. This means it is not a co-decision by the employer and em-ployee representatives, neither is it negotiation nor bargaining betweenthem. Decision making remains the responsibility of management.However, it is still more than simply providing information, as set outabove.

Finally, as has been noted previously, there is no specific obligation forI&C representatives to report back to the employees they represent, or toobtain their views. Nevertheless, it is good practice for them to do so, sothat the views of the workforce are fairly represented in meetings withemployers.

Timing and frequencyThere is no specification in the legislation as to the frequency or timingof information and consultation. These are matters to be discussed andagreed by the parties concerned. However, it is possible to identify someuseful pointers in respect of each.

TimingIt has been noted before that information must be provided to represen-tatives in good time so that they can consider it in advance of a meetingcalled to discuss it. Just how far in advance of the meeting will dependon the quantity and complexity of the information. Another considerationhere may be the confidentiality of the information.

Given the requirement to provide information on ‘probable develop-ments’, the timing of this obviously has to be in advance rather than afterthe event; but it also must reflect the degree of certainty of the develop-ments, so that they are indeed likely to happen.

Similarly, consultation implies an activity that happens prior to anydecision making, such that there is the possibility of influencing that de-cision. However, it must be borne in mind that consultation can take placeat too advanced a stage, when it may simply serve to alarm and concern,while not serving any practical purpose.

FrequencyGiven the intention of the directive of strengthening dialogue and pro-moting mutual trust, improving risk anticipation and promoting em-ployee involvement, there is clearly an expectation that informationshould be provided and consulted upon regularly (at least annually)rather than in very specific situations.

It is also recognized that the variety of circumstances affecting any un-dertaking will determine the need for information and consultation in

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each one. However, the point made above about the timing in relation to‘probable developments’ will influence the frequency as well as timing,given the importance of being able to discuss the specifics as eventsunfold.

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Appendix 2:The Market ResearchSociety Code ofConduct

INTRODUCTION

The Market Research Society (MRS)With members in more than 70 countries, MRS is the world’s largest as-sociation representing providers and users of market, social, and opinionresearch, and business intelligence.

MRS serves both individuals and organisations who identify with itscore values of professionalism, excellence, and effectiveness.

It has a diverse membership of individual researchers within agencies,independent consultancies, client-side organisations, the public sectorand the academic community – at all levels of seniority and in all jobfunctions.

MRS Company Partners include agencies, suppliers, and buyers of alltypes and sizes who are committed throughout their organisations tosupporting the core MRS values.

All individual members and Company Partners agree to self-regulatorycompliance with the MRS Code of Conduct. Extensive advice to supportthis commitment is provided by MRS through its Codeline service andby publication of a wide range of specialist guidelines on best practice.

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MRS offers various qualifications and membership grades, as well astraining and professional development resources to support them. It isthe official awarding body in the UK for vocational qualifications in mar-ket research.

MRS is a major supplier of publications and information services, con-ferences and seminars, and many other meeting and networking oppor-tunities for researchers.

MRS is ‘the voice of the profession’ in its media relations and publicaffairs activities on behalf of professional research practitioners, and aimsto achieve the most favourable climate of opinion and legislative envi-ronment for research.

THE CODE OF CONDUCT

This edition:This edition of the Code of Conduct was agreed by MRS to be operativefrom 1 December 2005.

It is a fully revised version of a self-regulatory Code which has been inexistence since 1954.

Who it applies to:All Members of the MRS must comply with this Code. It applies to allMembers, whether they are engaged in consumer, business-to-business,social, opinion, international or any other type of confidential researchproject.

It applies to all Members irrespective of the sector or methodologiesused eg quantitative, qualitative, mystery shopping.

It also applies to MRS Members when conducting non-market researchexercises using research techniques eg database building or researchprojects which are used for purposes other than research. More detailabout these activities can be found in the guidelines Using Research Tech-niques for Non-Research Purposes and clause B48.

Additionally MRS Company Partner organisations are required to takesteps to ensure that all individuals employed or engaged by them(whether MRS Members or not) comply with this Code as if they wereMRS Members.

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The purpose of the Code:The Code of Conduct is designed to support all those engaged in market,social or opinion research in maintaining professional standards.

The Code is also intended to reassure the general public and otherinterested parties that research is carried out in a professional and ethicalmanner.

The principles of the Code:These are the core principles of the MRS Code of Conduct which are basedupon the ESOMAR principles (visit www.esomar.org for more details):

1. Market researchers will conform to all relevant national and interna-tional laws.

2. Market researchers will behave ethically and will not do anythingwhich might damage the reputation of market research.

3. Market researchers will take special care when carrying out researchamong children and other vulnerable groups of the population.

4. Respondents’ cooperation is voluntary and must be based on ade-quate, and not misleading, information about the general purpose andnature of the project when their agreement to participate is being ob-tained and all such statements must be honoured.

5. The rights of respondents as private individuals will be respected bymarket researchers and they will not be harmed or disadvantaged asthe result of cooperating in a market research project.

6. Market researchers will never allow personal data they collect in amarket research project to be used for any purpose other than marketresearch.

7. Market researchers will ensure that projects and activities are de-signed, carried out, reported and documented accurately, transpar-ently, objectively and to appropriate quality.

8. Market researchers will conform to the accepted principles of faircompetition.

The structure of the Code:Section A of the Code sets out general rules of professional conduct.

Section B of the Code sets out more specific rules of professional con-duct as they apply in different aspects of research.

The Appendix sets out the ICC/ESOMAR International Code of Mar-keting and Social Research Practice.

All MRS Members must adhere to the rules in Sections A and B of theCode.

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www.esomar.org

MRS GUIDELINES AND REGULATIONSA full list of guidelines, which provide additional best practice guidance,appear on the Society’s website www.mrs.org.uk. Unless otherwisestated these guidelines are not binding. Binding guidelines currently inforce are as follows:

1. MRS guidance on data protection (which has been written and agreedwith the regulator, the Information Commissioner’s Office) is bindingon Members (except those that are published as consultative drafts).

2. MRS Guidance Note on Prize Draws which is based on other self-regulatory rules.

MRS regulations, including those for using research techniques for non-research purposes (which are detailed in a separate document), are bind-ing on Members.

MRS Disciplinary RegulationsUnder the MRS Disciplinary Regulations, membership may be with-drawn or other disciplinary action taken, if a Member is deemed guiltyof unprofessional conduct. This is defined as a Member:

a) being guilty of any act or conduct which, in the opinion of a bodyappointed by Council, might bring discredit on the profession, theprofessional body or its Members; or

b) being found by a body appointed by Council to be guilty of any breachof the rules set out in Sections A and/or B of this Code of Conduct; or

c) being found by a body appointed by Council to be guilty of any breachof the provisions set out in any MRS binding guideline laid down fromtime to time by the Council; or

d) being found by a body appointed by Council to be guilty of any breachof any other regulations laid down from time to time by Council; or

e) failing without good reason to assist the professional body in the in-vestigation of a complaint; or

f) in the absence of mitigating circumstances having become bankruptor having made any arrangement or composition with his/hercreditors; or

g) being found to be in breach of the Data Protection Act 1998 or othercomparable legislation applicable outside the UK. Or being found, bya body appointed by Council, to have infringed any of the eight dataprotection principles set out in the Act or similar provisions set out incomparable legislation outside the UK.

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www.mrs.org.uk

Note that where more than one MRS Member is involved in a matterunder complaint, whilst the MRS reserves the right to proceed with aninvestigation and other relevant processes against all such Membersunder its Disciplinary Regulations, it will usually apply its discretion toproceed only against the most senior MRS Member(s) involved.

GENERALIt is the responsibility of Members to keep themselves updated on changesor amendments to any part of this Code which are published from timeto time and announced in publications and on the web pages of the Society.If in doubt about the interpretation of the Code, members may consultthe MRS Market Research Standards Board via its Codeline Service whichdeals with MRS Code enquiries and advises on best practice.

The MRS Code of Conduct does not take precedence over national law.Members responsible for international research shall take its provisionsas a minimum requirement and fulfil any other responsibilities set downin law or by nationally agreed standards.

DEFINITIONS FOR THE PURPOSES OF THE MRSCODE OF CONDUCT

Agency:Agency includes any individual, organisation, department or division,including any belonging to the same organisation as the Client which isresponsible for, or acts as, a supplier on all or part of a research project.

Children:Children are defined as those aged under 16. See Section B for full detailsabout children.

Client:Client includes any individual, organisation, department or division, in-cluding any belonging to the same organisation as the Member, which isresponsible for commissioning or applying the results from a researchproject.

Company Partner:An organisation with MRS Members that has signed the MRS CompanyPartner Service Quality Commitment which applies throughout theorganisation.

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Confidential Research:Confidential research describes research projects which are for the pur-poses of research (as defined below) and do not disclose personal detailsat an identifiable level.

Consultant:Any individual or organisation that provides research services. Consul-tants can also be a sub-contractor in the research relationship.

Identity:The identity of a Respondent includes, as well as his/her name and/oraddress, any other information which offers a reasonable chance that he/she can be identified by anyone who has access to the information.

Interview:An interview is any form of contact intended to obtain information froma Respondent or group of Respondents.

Interviewer:Person involved in the collection of data for market, opinion and socialresearch purposes.

Member:A Member is an individual who has been admitted to membership of theMRS in one of the five categories set out in Article 3 of the Articles ofAssociation (ie Nominated Members, Full Members, Associate Members,Affiliate Members and Field Members).

Mystery Shopping:Mystery shopping or Mystery customer research are the same activityand can be defined as: The use of individuals trained to experience andmeasure any customer service process, by acting as potential customersand in some way reporting back on their experiences in a detailed andobjective way.

The Profession:The profession is the body of research practitioners and others engagedin (or interested in) marketing, social and opinion research.

Professional body:Professional body refers to MRS.

Public place:A public place is one to which the public has access (where admission hasbeen gained with or without a charge) and where an individual could

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reasonably expect to be observed and/or overheard by other people, forexample in a shop, in the street or in a place of entertainment.

Publication:The communication of information to the public.

Records:The term records includes anything containing information relating to aresearch project and covers all data collection and data processing docu-ments, audio and visual recordings. Primary records are the most com-prehensive record of information on which a project is based; they includenot only the original data records themselves, but also anything neededto evaluate those records, such as quality control documents. Secondaryrecords are any other records about the Respondent and the researchresults.

Recruiter:Person who identifies and invites Respondents to participate in a researchproject.

Research:Research is the collection and analysis of data from a sample or census ofindividuals or organisations relating to their characteristics, behaviour,attitudes, opinions or possessions. It includes all forms of market, opinionand social research such as consumer and industrial surveys, psycho-logical investigations, qualitative interviews and group discussions,observational, ethnographic, and panel studies.

Respondent:A Respondent is any individual or organisation from or about whom datais collected or is approached for interview.

Responsible Adult:An individual who has personal accountability for the well-being of achild, for example a parent, guardian, teacher, nanny or grandparent. SeeSection B for full details about children.

Sub-contractor:Any individual or organisation that undertakes a part of a research projectunder the instruction of the Member (self-employed interviewers are notdefined as sub-contractors for the purpose of this Code).

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INTRODUCTION TO SECTIONS A AND BSections A and B below set out rules of professional conduct.

Section A sets out general rules.Section B sets out more specific rules as they apply in different aspects

of research.All rules set out in Sections A and B must be observed and adhered to

by all MRS Members with any involvement, or with any responsibility,at any level in a matter. This means that more than one MRS Membermight be in breach of a rule in respect of the same matter.

Note that where more than one MRS Member is involved in a matterunder complaint, whilst the MRS reserves the right to proceed with aninvestigation and other relevant processes against all such Membersunder its Disciplinary Regulations, it will usually apply its discretion toproceed only against the most senior MRS Member(s) involved.

All MRS Members should be aware that if found under the MRS Dis-ciplinary Regulations to be in breach of any of the rules in Sections A and/or B of this Code, he/she will be deemed guilty of unprofessional conductand disciplinary action may be taken against him/her.

For further information about the MRS disciplinary procedure, MRSMembers are referred to the relevant section in the Introduction to thisCode and to the Disciplinary Regulations themselves (which are availableon www.mrs.org.uk).

Participants in the MRS Company Partner Service are also required, inaccordance with the terms of the Service, to take steps to ensure that theCode of Conduct is adhered to by all individuals employed or engagedby them (whether MRS Members or not). (The rules of this service aredetailed in the Company Partner Quality Commitment.)

SECTION A: GENERAL RULES OFPROFESSIONAL CONDUCT

A1 Research must conform to the national and international legislationrelevant to a given project including in particular the Data Protec-tion Act 1998 or other comparable legislation applicable outside theUK.

A2 Members must take reasonable steps to avoid conflicts of interestwith Clients or employers and must make prior voluntary and fulldisclosure to all parties concerned of all matters that might give riseto such conflict.

A3 Members must act honestly in dealings with Respondents, Clients(actual or potential), employers, employees, sub-contractors andthe general public.

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www.mrs.org.uk

A4 The use of letters after an individual’s name to indicate membershipof MRS is permitted only in the case of Fellows (FMRS), Full Mem-bers (MMRS) and Associate Members (AMRS). These letters mustnot be used by any individual not admitted in any of these MRScategories of membership.Comment: All MRS members may point out, where relevant, that theybelong to the appropriate category of the professional body.

A5 Members must not speak or imply that they speak on behalf of MRSunless they have the written authority of Council or of some dulydelegated individual or committee.

A6 Members must not make false claims about their skills and experi-ence or those of their organisation.

A7 Members must take reasonable steps to ensure that others do notbreach or cause a breach of this Code.Comment: This includes:Members taking reasonable steps to ensure that the people with whom theywork (including other Members, non-member research practitioners, col-leagues, Clients, consultants, sub-contractors) are sufficiently familiarwith this Code that they are unlikely to breach or cause it to be breachedunknowingly or unintentionally, andMembers with responsibility for implementing processes, procedures andcontracts, taking reasonable steps to ensure that they are such that thisCode is unlikely to be breached or caused to be breached by others un-knowingly or unintentionally.

A8 Members must not act in a way which might bring discredit on theprofession, MRS or its Members.

A9 Members must not disparage or unjustifiably criticise other Mem-bers or other non-member researchers.

A10 Members must take all reasonable precautions to ensure thatRespondents are not harmed or adversely affected as a result ofparticipating in a research project.

SECTION B: RULES OF PROFESSIONALCONDUCT APPLICABLE TO RESEARCH

This section relates to specific aspects of work commonly carried out byMRS Members and other research practitioners.

Some of the rules in this section are legal requirements. Membersshould be aware that this Code does not cover all relevant legislative re-quirements of Members and it is the responsibility of all Members tofamiliarise themselves with these. Members should be aware in particularthat breaches of the Data Protection Act 1998 or other comparable legis-lation outside the UK are grounds for disciplinary action under MRSDisciplinary Regulations.

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Designing and Setting up a Research ProjectB1 Members must not knowingly take advantage, without permission,

of the unpublished work of another research practitioner which isthe property of that other research practitioner.Comment: This means, where applicable, that Members must not know-ingly carry out or commission work based on proposals prepared by aresearch practitioner in another organisation unless permission has beenobtained.

B2 All written or oral assurances made by any Member involved incommissioning or conducting projects must be factually correct andhonoured by the Member.

B3 Members must take reasonable steps to design research to thespecification agreed with the Client.

B4 Members must take reasonable steps to design research whichmeets the quality standards agreed with the Client.

B5 Members must take reasonable steps to ensure that the rights andresponsibilities of themselves and Clients are governed by a writtencontract and/or internal commissioning contract.

B6 Members must not disclose the identity of Clients or any confiden-tial information about Clients without the Client’s permission un-less there is a legal obligation to do so.

Use of Client Databases, Lists and Personal Contact DetailsB7 Where lists of named individuals are used eg Client databases, the

list source must be revealed at an appropriate point in the interview,if requested. This overrides the right to Client anonymity.

Respondents’ Rights to AnonymityB8 The anonymity of Respondent s must be preserved unless they have

given their informed consent for their details to be revealed or forattributable comments to be passed on.Comment: Members must be particularly careful if sample sizes are verysmall (such as in business and employee research) that they do not inad-vertently identify organisations or departments and therefore individuals.

B9 If Respondents have given consent for data to be passed on in a formwhich allows them to be personally identified, Members must:

demonstrate that they have taken all reasonable steps to ensure thatit will only be used for the purpose for which it was collected; andfully inform Respondents as to what will be revealed, to whom andfor what purpose.

B10 If Respondents request individual complaints or unresolvedissues to be passed back to a Client (for example in customer satis-faction research), Members must comply with that request. Thecomments/issues to be passed back to a Client must be agreedwith the Respondent and must not be linked back to any other dataor used for any other purpose without the explicit consent of theRespondent.

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Re-interviewing RespondentsB11 A follow up interview with a Respondent can be carried out only if

the Respondent ’s permission has been obtained at the previousinterview. The only exception to this is re-contact for quality controlpurposes.

B12 Any re-contact must match the assurances given to Respondents atthe time that permission was gained eg when re-contact was tooccur, the purpose and by whom.

B13 Respondent details must not be passed on to another third party forresearch or any other purposes without the prior consent of theRespondent. The only exception to this is if the Client is the DataController of the Respondent data.

Designing the QuestionnaireB14 Members must take reasonable steps to ensure all of the following:

that questions are fit for purpose and Clients have been advisedaccordingly;that the design and content of questionnaires are appropriate forthe audience being researched;that Respondents are able to answer the questions in a way thatreflects the view they want to express;that Respondents are not led towards a particular answer;that answers are capable of being interpreted in an unambiguousway;that personal data collected is relevant and not excessive.

Preparing for FieldworkCommunicating with RespondentsB15 If there is to be any recording, monitoring or observation during an

interview, Respondents must be informed about this both at re-cruitment and at the beginning of the interview.

B16 Members must not knowingly make use of personal data collectedillegally.

FieldworkB17 Respondents must not be misled when being asked for cooperation

to participate in a research project.B18 A Respondent’s right to withdraw from a research project at any

stage must be respected.B19 Members must ensure that Respondents are able to check without

difficulty the identity and bona fides of any individual and/or theiremployer conducting a research project (including any sub-contractors).

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B20 For telephone and face-to-face interviews, calls must not be madeto a household (local time) before 9 am weekdays and Saturdays,10 am Sundays or after 9 pm any day, unless by appointment.

B21 Members must ensure that all of the following are clearly commu-nicated to the Respondent :

the name of the interviewer (an Interviewer’s Identity Card mustbe shown if face to face);an assurance that the interview will be carried out according to theMRS Code of Conduct;the general subject of the interview;the purpose of the interview;if asked, the likely length of the interview;any costs likely to be incurred by the Respondent.

B22 Respondents (including employees in employee research) must notbe unduly pressurised to participate.

B23 Members must delete any responses given by the Respondent, ifrequested, and if this is reasonable and practicable.

B24 Recruiters/interviewers must not reveal to any other Respondentsthe detailed answers provided by any Respondent or the identityof any other Respondent interviewed.

IncentivesB25 Where incentives are offered, Members must clearly inform the

Respondent who will administer the incentive.Comment: Incentives need not be of a monetary nature to be acceptable toa Respondent as a token of appreciation.With the Client’s permission, an offer to supply the Respondent with abrief summary report of the project’s findings can sometimes prove a bet-ter alternative encouragement to participate in a research project. Otheralternatives are for example:

charity donations;non-monetary gifts;prize draws (for prize draws the rules, as detailed in the MRS Prize DrawsGuidance Note, must be adhered to).

ChildrenComment: The intention of the following provisions regarding the age ofRespondents is to protect children who are potentially vulnerable membersof society and to strengthen the principle of public trust.

B26 Consent of a parent or responsible adult (acting in loco parentis)must be obtained before interviewing a child under 16 in the fol-lowing circumstances:

in home/at home (face-to-face and telephone interviewing);group discussions/depth interviews;postal questionnaires;

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internet questionnaires;e-mail;where interviewer and child are alone together;in public places such as in-street/in-store/central locations (seeexception under B27).

B27 Interviews being conducted in public places, such as in-street/in-store/central locations, with 14 year olds or over, may take placewithout consent of a parent or responsible adult. In these situationsMembers must give an explanatory thank you note to the child.Comment: Under special circumstances, permission to waive parentalconsent may be obtained, but only with the prior approval of the MRSMarket Research Standards Board.

B28 Where the consent of a parent or responsible adult is requiredMembers must ensure that the adult is given sufficient informationabout the nature of the research to enable them to provide informedconsent.

B29 Members must ensure that the parent or responsible adult givingconsent is recorded (by name, relationship or role).

B30 For self-completion postal questionnaires, Members must ensurethat:

when it is known (or ought reasonably to be known) that all or amajority of Respondents are likely to be under 16, these are ad-dressed to the parent or responsible adult; andwhen it is known (or ought reasonably to be known) that all or amajority of Respondents are likely to be under 16, all question-naires carry a note or notice explaining that consent is required forall children to participate.

B31 For research administered electronically over the internet, when itis known (or ought reasonably to be known) that all or a majorityof Respondents are likely to be under 16, Members must ensure thatRespondents are asked to give their age before any other personalinformation is requested. Further, if the age given is under 16, thechild must be excluded from giving further personal informationuntil the appropriate consent from a parent or responsible adult hasbeen obtained.

B32 In all cases, Members must ensure that a child has an opportunityto decline to take part, even though a parent or a responsible adulthas given consent on their behalf. This remains the case if the re-search takes place in school.

B33 Personal information relating to other people must not be collectedfrom children unless for the purposes of gaining consent from aparent or a responsible adult.

Qualitative ResearchB34 At the time of recruitment (or before the research takes place if de-

tails change after recruitment), Members must ensure that Respon-dents are told all relevant information as per rule B21 and:

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the location of the discussion and if it is to take place in a viewingfacility;whether observers are likely to be present;when and how the discussion is to be recorded;the likely length of the discussion including the start and finishtime; andthe Member, moderator and/or research agency that will be con-ducting the research.

B35 Members must ensure that completed recruitment questionnaires,incentive and attendance lists, or any other research informationwhich identifies Respondents, are not passed to Clients without theexplicit permission of the Respondents; and Members must takereasonable steps to ensure that the documents are used only for thepurpose agreed at the time of data collection.

B36 If Members have agreed with Clients that observers are to bepresent, Members must inform all observers fully about their legaland ethical responsibilities.

B37 Members must make clear to Respondents the capacity in whichobservers are present; Clients must be presented as such, even ifthey are also Researchers and/or Members of MRS.Comment: This also applies to Members themselves when an employee ofa Client organisation, advertising/design/PR agency etc.

B38 There are some situations where observers could adversely affectRespondents’ interests and/or wellbeing, and in such instances,Members must ensure that Respondents are told at an appropriatestage the identity of any observer who might be present at the dis-cussion or interview.

B39 Members must ensure that, in instances where observers may knowRespondents (as may occur in business-to-business research),Respondents are informed before the start that their interviews areto be observed, with a warning that the observers may includeClients who already know them.

B40 The issue of anonymity and recognition is a particular problemin business and employee research. If guarantees cannot be giventhen Members must ensure that observers are fully introduced be-fore the group/interview begins and Respondents given a chanceto withdraw.

B41 Members must ensure that Respondents on attendance at a venueare informed about the nature of any observation, monitoring orrecording and Respondents are given the option of withdrawingfrom the group/interview.

B42 Members must ensure that any material handed to Clients orincluded in reports, without consent from Respondents, isanonymised eg transcripts containing verbatim comments andprojective material.Comment: Special care must be taken when the universe is small, as in thecase of some business-to-business research studies.

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Mystery ShoppingComment: The objective of a mystery customer research project is to pro-vide management information on processes and/or quality of service, inorder to aid training and retraining plans, improvements in service andhence increase customer satisfaction etc.For mystery shopping exercises the ‘Respondent’ will be a staff memberwho is subject to the mystery shop and as such there are different levelsof allowable disclosure and data usage.

B43 For mystery shopping of a Client’s own organisation, Membersmust take reasonable steps to ensure that:

the Client’s employees have been advised by their employer thattheir service delivery may be checked through mystery shopping;the objectives and intended uses of the results have been madeclear by the employer to staff (including the level of reporting if atbranch/store or individual level); andif mystery shopping is to be used in relation to any employmentterms and conditions, this has been made clear by the employer.

B44 Since competitors’ employees cannot be advised that they may bemystery shopped, Members must ensure that their identities are notrevealed. Members must ensure that employees are not recorded(eg by using audio, photographic or video equipment). This appliesin all instances where employees cannot be or have not been advisedthat they could be mystery shopped.

B45 Where there is mystery shopping of a Client’s agents or authoriseddistributors (as well as any organisations which are responsible toa compliance authority), Members must ensure that:

the employees to be mystery shopped have been advised by theiremployer and/or regulator that their service delivery and/or reg-ulatory compliance may be checked by mystery shopping;the objectives and intended uses of the results have been made clearby the employer and/or regulator (including the level of reportingif at branch/store or individual level); andif mystery shopping is to be used in relation to any employment/contractual/regulatory terms and conditions this has been madeclear by the employer and/or regulator.

B46 Members must take reasonable steps to ensure that mystery shop-pers are fully informed of the implications and protected from anyadverse implications of conducting a mystery shopping exercise.Comment: For example, they must be made aware by the Member thattheir identity may be revealed to the organisation/individual being mys-tery shopped if they use personal cards to make purchases, loan arrange-ments etc and credit ratings may be affected.

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ObservationB47 Members must ensure that all of the following are undertaken when

observation equipment is being used:

clear and legible signs must be placed in areas where surveillanceis taking place;cameras must be sited so that they monitor only the areas intendedfor surveillance.signs must state the individual/organisation responsible for thesurveillance, including contact information and the purpose ofthe observation.

Comment: Rule A10 of the Code requires Members to take all reasonableprecautions to ensure that Respondents are not harmed or adversely af-fected as a result of participating in a research project. This may haveparticular pertinence in an ethnographic and observational setting. Issuesto be considered are:

the need to be sensitive to the possibility that their presence may, at times,be seen as an unwarranted intrusion; here safeguards, and the abilityto end the observation quickly, must be built into any ethnographicsituation;the need to be sensitive to the possibility that Respondents may becomeover involved with them at a personal level; andthe need to be sensitive to the possibility of ‘observation fatigue’; againthere is value in having the ability to end the observation quickly withinany ethnographic situation.

Using Research Techniques for Non-Research PurposesB48 Members must adhere to the rules in the separate regulations, Using

Research Techniques for Non-Research Purposes, when conducting ex-ercises which are for purposes in addition to, or other than, research.

Analysis and Reporting of Research FindingsB49 Members must ensure that research conclusions disseminated by

them are clearly and adequately supported by the data.B50 Members must comply with reasonable requests to make available

to anyone the technical information necessary to assess the validityof any published findings from a research project.

B51 Members must ensure that their names, or those of their employer,are only used in connection with any research project as an assur-ance that the latter has been carried out in conformity with the Codeif they are satisfied on reasonable grounds that the project has in allrespects met the Code’s requirements.

B52 Members must allow Clients to arrange checks on the quality offieldwork and data preparation provided that the Client pays anyadditional costs involved in this.

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B53 Members must provide Clients with sufficient technical details toenable Clients to assess the validity of results of research projectscarried out on their behalf.

B54 Members must ensure that data tables include sufficient technicalinformation to enable reasonable interpretation of the validity of theresults.

B55 Members must ensure that reports include sufficient information toenable reasonable interpretation of the validity of the results.

B56 Members must ensure that reports and presentations clearly dis-tinguish between facts and interpretation.

B57 Members must ensure that when interpreting data they make clearwhich data they are using to support their interpretation.

B58 Members must ensure that qualitative reports and presentationsaccurately reflect the findings of the research in addition to the re-search practitioner’s interpretations and conclusions.

B59 Members must take reasonable steps to check and where necessaryamend any Client-prepared materials prior to publication to ensurethat the published research results will not be incorrectly or mis-leadingly reported.Comment: This means that Members are expected to take reasonable stepsto ensure that any press releases include either final report details (includ-ing question wording for any questions quoted) or details of where theinformation can be obtained (eg via a website link).

B60 Members must take reasonable steps to ensure that findings from aresearch project, published by themselves or in their employer’sname, are not incorrectly or misleadingly presented.

B61 If Members are aware, or ought reasonably to be aware, that find-ings from a research project have been incorrectly or misleadinglyreported by a Client he/she must at the earliest opportunity:

refuse permission for the Client to use their name further in con-nection with the incorrect or misleading published findings; andpublish in an appropriate forum the relevant technical details ofthe project to correct any incorrect or misleading reporting.

Data StorageB62 Members must take reasonable steps to ensure that all hard copy

and electronic lists containing personal data are held securely inaccordance with the relevant data retention policies and/or con-tractual obligations.

B63 Members must take reasonable steps to ensure that all parties in-volved in the research are aware of their obligations regardingsecurity of data.

B64 Members must take reasonable steps to ensure that the destructionof data is adequate for the confidentiality of the data being de-stroyed. For example, any personal data must be destroyed in amanner which safeguards confidentiality.

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APPENDIX: ICC/ESOMAR CODE OFMARKETING AND SOCIAL RESEARCH

PRACTICEThe MRS Code of Conduct is based upon the principles of the ICC/ES-OMAR Code whilst taking account of UK legislation and practice. TheICC/ESOMAR Code is included for reference only. All disciplinary andcompliance enforcement will be in relation to the MRS Code of Conduct.

A. General

1. Marketing research must always be carried out objectively and inaccordance with established scientific principles.

2. Marketing research must always conform to the national and inter-national legislation which applies in those countries involved in agiven research project.

B. The Rights of Respondents

3. Respondents’ cooperation in a marketing research project is entirelyvoluntary at all stages. They must not be misled when being asked fortheir cooperation.

4. Respondents’ anonymity must be strictly preserved. If the Respon-dent on request from the Researcher has given permission for data tobe passed on in a form which allows that Respondent to be personallyidentified:

(a) the Respondent must first have been told to whom the informationwould be supplied and the purposes for which it will be used, andalso

(b) the Researcher must ensure that the information will not be used forany non-research purpose and that the recipient of the informationhas agreed to conform to the requirements of this Code.

5. The Researcher must take all reasonable precautions to ensure thatRespondents are in no way directly harmed or adversely affected asa result of their participation in a marketing research project.

6. The Researcher must take special care when interviewing childrenand young people. The informed consent of the parent or responsibleadult must first be obtained for interviews with children.

7. Respondents must be told (normally at the beginning of the interview)if observation techniques or recording equipment are being used,

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except where these are used in a public place. If a Respondent sowishes, the record or relevant section of it must be destroyed ordeleted. Respondents’ anonymity must not be infringed by the use ofsuch methods.

8. Respondents must be enabled to check without difficulty the identityand bona fides of the Researcher.

C. The Professional Responsibilities of Researchers

9. Researchers must not, whether knowingly or negligently, act in anyway which could bring discredit on the marketing research professionor lead to a loss of public confidence in it.

10. Researchers must not make false claims about their skills and experi-ence or about those of their organisation.

11. Researchers must not unjustifiably criticise or disparage otherResearchers.

12. Researchers must always strive to design research which is cost-efficient and of adequate quality, and then to carry this out to thespecifications agreed with the Client.

13. Researchers must ensure the security of all research records in theirpossession.

14. Researchers must not knowingly allow the dissemination of conclu-sions from a marketing research project which are not adequatelysupported by the data. They must always be prepared to make avail-able the technical information necessary to assess the validity of anypublished findings.

15. When acting in their capacity as Researchers the latter must not under-take any non-research activities, for example database marketing,involving data about individuals which will be used for direct mar-keting and promotional activities. Any such non-research activitiesmust always, in the way they are organised and carried out, be clearlydifferentiated from marketing research activities.

D. The Mutual Rights and Responsibilities ofResearchers and Clients

16. These rights and responsibilities will normally be governed by a writ-ten Contract between the Researcher and the Client. The parties mayamend the provisions of Rules 19–23 below if they have agreed to thisin writing beforehand; but the other requirements of this Code maynot be altered in this way. Marketing research must also always be

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conducted according to the principles of fair competition, as generallyunderstood and accepted.

17. The Researcher must inform the Client if the work to be carried outfor that Client is to be combined or syndicated in the same project withwork for other Clients but must not disclose the identity of suchClients.

18. The Researcher must inform the Client as soon as possible in advancewhen any part of the work for that Client is to be subcontracted outsidethe Researcher’s own organisation (including the use of any outsideconsultants). On request the Client must be told the identity of anysuch subcontractor.

19. The Client does not have the right, without prior agreement betweenthe parties involved, to exclusive use of the Researcher’s services orthose of his organisation, whether in whole or in part. In carrying outwork for different Clients, however, the Researcher must endeavourto avoid possible clashes of interest between the services provided tothose Clients.

20. The following Records remain the property of the Client and must notbe disclosed by the Researcher to any third party without the Client’spermission:

(a) Marketing research briefs, specifications and other informationprovided by the Client.

(b) The research data and findings from a marketing research project(except in the case of syndicated or multi-client projects or serviceswhere the same data are available to more than one Client).

The Client has however no right to know the names or addresses ofRespondents unless the latter’s explicit permission for this has first beenobtained by the Researcher (this particular requirement cannot be alteredunder Rule 16).

21. Unless it is specifically agreed to the contrary, the following Recordsremain the property of the Researcher:

(a) Marketing research proposals and cost quotations (unless these havebeen paid for by the Client). They must not be disclosed by the Clientto any third party, other than to a consultant working for the Clienton that project (with the exception of any consultant working also fora competitor of the Researcher). In particular, they must not be usedby the Client to influence research proposals or cost quotations fromother Researchers.

(b) The contents of a report in the case of syndicated and/or multi-clientprojects or services where the same data are available to more than

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one Client and where it is clearly understood that the resulting reportsare available for general purchase or subscription. The Client may notdisclose the findings of such research to any third party (other than tohis own consultants and advisors for use in connection with his busi-ness) without the permission of the Researcher.

(c) All other research Records prepared by the Researcher (with the ex-ception in the case of non-syndicated projects of the report to theClient, and also the research design and questionnaire where the costsof developing these are covered by the charges paid by the Client).

22. The Researcher must conform to currently agreed professional prac-tice relating to the keeping of such Records for an appropriate periodof time after the end of the project. On request the Researcher mustsupply the Client with duplicate copies of such Records provided thatsuch duplicates do not breach anonymity and confidentiality require-ments (Rule 4); that the request is made within the agreed time limitfor keeping the Records; and that the Client pays the reasonable costsof providing the duplicates.

23. The Researcher must not disclose the identity of the Client (providedthere is no legal obligation to do so), or any confidential informationabout the latter’s business, to any third party without the Client’spermission.

24. The Researcher must on request allow the Client to arrange for checkson the quality of fieldwork and data preparation provided that theClient pays any additional costs involved in this. Any such checksmust conform to the requirements of Rule 4.

25. The Researcher must provide the Client with all appropriate technicaldetails of any research project carried out for that Client.

26. When reporting on the results of a marketing research project the Re-searcher must make a clear distinction between the findings as such,the Researcher's interpretation of these and any recommendationsbased on them.

27. Where any of the findings of a research project are published by theClient the latter has a responsibility to ensure that these are not mis-leading. The Researcher must be consulted and agree in advance theform and content of publication, and must take action to correct anymisleading statements about the research and its findings.

28. Researchers must not allow their names to be used in connection withany research project as an assurance that the latter has been carriedout in conformity with this Code unless they are confident that theproject has in all respects met the Code's requirements.

29. Researchers must ensure that Clients are aware of the existence of thisCode and of the need to comply with its requirements.

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0-7494-4540-8_APP 2_190


Appendix 3:Conducting researchwith employees

INTRODUCTIONThese Guidelines interpret the MRS Code of Conduct (revised 2005) andprovide additional best practice guidance. Unless otherwise stated,Guidelines are not binding.

They should be read in conjunction with other MRS guidelines, par-ticularly the Mystery Customer Research Guidelines, since this type ofresearch covers another aspect of monitoring of employees. The main aimof these guidelines is to ensure that research is transparent to employeesin order to promote public support for market research. More generally,they seek to promote professionalism in the conduct of employeeresearch.

The general public and other interested parties are entitled to completeassurance that every research project is carried out in accordance with theCode of Conduct and that their rights and privacy are respected.

Rules from the Code of Conduct applicable in each section of this doc-ument are headed ‘The Rules’. These rules are binding on MRS membersand breaches may result in disciplinary action. The guidance that followsthe rules provides interpretation and additional best practice. Membersare reminded that this document is designed to complement the MRSCode of Conduct and should not be consulted in isolation.

0-7494-4540-8_APP 3_191

As specified in the Code, it is the responsibility of the researcher to keepabreast of any legislation which could affect research with employees andto ensure that all those involved in a project are aware of and agree toabide by the MRS Code of Conduct.

This material is provided for information only. It is not legal adviceand should not be relied upon as such. Specific legal advice should betaken in relation to specific issues.

MRS would like to thank Peter Goudge for his co-authorship of thisguidance, and also for the help and advice of the many members of theMRS Employee Research Group (ERG) who have contributed to the var-ious editions of this guideline over the years.

DEFINITION OF EMPLOYEE RESEARCHThe ‘discipline’ of employee research is any formalised activity devel-oped to gather information about the opinions and behaviours of em-ployees. It is the exploration of aspects of an individual’s working lifewith an employer – what they do as well as what they think. Rather thanseeing it as an isolated practice, this broad definition seeks to place em-ployee research within the wider framework of two-way internal com-munications and effective Human Resource Management, in which wesee it as playing an integral part.

Please note that the word ‘interview’ is used generically in this docu-ment to cover the process whereby information is gathered from respon-dents, even though a considerable amount of this type of research isconducted on a self-completion basis whether on paper or electronicallyvia e-mail, intranets and the internet.

RELATIONSHIP WITH DATA PROTECTIONAll personal employee data is covered by the Data Protection Act 1998.For full details of the implications of the Act on employer/employeerelationships see the Information Commissioner’s publications onemployment. Details are available via www.ico.gov.uk in the Codes ofPractice section of the website.

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www.ico.gov.uk

GUIDELINES

1. Planning a Quantitative StudyA. Communication with EmployeesThe Rules

A3 Members must act honestly in dealings with Respondents, Clients(actual or potential), employers, employees, sub-contractors and thegeneral public.

B2 All written or oral assurances made by any Member involved incommissioning or conducting projects must be factually correct andhonoured by the Member.

B21 Members must ensure that all of the following are clearly commu-nicated to the Respondent:the name of the interviewer (an Interviewer’s Identity Card mustbe shown if face to face);an assurance that the interview will be carried out according to theMRS Code of Conduct;the general subject of the interview;the purpose of the interview;if asked, the likely length of the interview;any costs likely to be incurred by the Respondent.

B22 Respondents (including employees in employee research) must notbe unduly pressurised to participate.

Guidance

1. Prior publicity is important to help boost rates of response. Any num-ber of media can be deployed to advise employees of the research andits purpose – ranging from in-house magazines and personal briefingsto videos and posters as well as e-mail and the intranet.

2. A letter from a relevant person with authority should be sent prior tothe research, or at the time the research is conducted.

3. In accordance with rule B2, any assurances made in communicationswith staff regarding the research (such as anonymity) must behonoured.

4. Employees should be informed as to how it is intended that the resultsfrom the research will be used; and, where relevant, examples of howresults from previous studies have been acted upon. Such informationwill help to encourage participation.

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B. Sample SelectionThe Rules

B8 The anonymity of Respondents must be preserved unless they havegiven their informed consent for their details to be revealed or forattributable comments to be passed on.Comment: Members must be particularly careful if sample sizes are verysmall (such as in business and employee research) that they do not inad-vertently identify organisations or departments and therefore individuals.

B9 If Respondents have given consent for data to be passed on in a formwhich allows them to be personally identified, Members must:demonstrate that they have taken all reasonable steps to ensure thatit will only be used for the purpose for which it was collected; andfully inform Respondents as to what will be revealed, to whom andfor what purpose.

B10 If Respondents request individual complaints or unresolved issuesto be passed back to a Client (for example in customer satisfactionresearch), Members must comply with that request. The com-ments/issues to be passed back to a Client must be agreed withthe Respondent and must not be linked back to any other data orused for any other purpose without the explicit consent of theRespondent.

B18 A Respondent’s right to withdraw from a research project at anystage must be respected.

B23 Members must delete any responses given by the Respondent, ifrequested, and if this is reasonable and practicable.

Guidance

1. To avoid skewed or unrepresentative data in quantitative studies,selection should be arranged to ensure that each sample represents abalanced cross-section of the whole. This can be achieved either bydrawing a random sample (eg selecting every nth name from an alpha-betical list of employees), or by setting quotas (eg a representativeproportion of the whole according to sub-groups such as department,job grade, age, working locations etc).

2. Sample sizes in specialised areas may be very small to the point whereemployees themselves could be identified. If there is a reasonable riskof an employee being identified, due to the sample size of the popu-lation or sub-population being covered, the employee should be in-formed of this risk at the beginning of the interview and given theopportunity to withdraw.

3. On some occasions employees may want requests or additionalcomments passed back to an employer. In these circumstances, in

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accordance with rule B10, the relevant comments must not be linkedback to any other data unless agreed. The researcher must honour anypromises made eg to pass the information to the employer forresolution.

4. Where the universe of respondents is small, and the respondents maybe well known to the client, special precautions should be taken tocomply with B8. All information provided to the client should bechecked to ensure that respondents cannot be identified – this includesthe selection of any verbatim comments from depths or groups thatthey may wish to use in a presentation or report.

2. The ResearchA: Qualitative ResearchThe Rules

B15 If there is to be any recording, monitoring or observation duringan interview, Respondents must be informed about this both atrecruitment and at the beginning of the interview.

B17 Respondents must not be misled when being asked for cooperationto participate in a research project.

B18 A Respondent’s right to withdraw from a research project at anystage must be respected.

B34 At the time of recruitment (or before the research takes place if de-tails change after recruitment), Members must ensure that Respon-dents are told all relevant information as per rule B21 and:the location of the discussion and if it is to take place in a viewingfacility;whether observers are likely to be present;when and how the discussion is to be recorded;the likely length of the discussion including the start and finishtime;the Member, moderator and/or research agency that will be con-ducting the research.

B37 Members must make clear to Respondents the capacity in whichobservers are present; Clients must be presented as such, even ifthey are also Researchers and/or Members of MRS.

Guidance

1. Researchers should reassure employees of the confidentiality of any-thing they may say in a group or depth interview.

2. In accordance with rule B15, the researcher must inform employeesabout any recording or monitoring methods (eg tape recording, videorecording, and presence of a mirror or a camera) both at recruitment

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and at the beginning of an interview, giving the employee the optionnot to proceed. This also applies to instances where remote monitoringis used. Employees may prefer groups to be recorded and transcribedand researchers should give employees this option.

3. Where permission is to be obtained to release digital, audio or videorecordings, the researcher should ensure that employees are given asmuch relevant information as possible about the future use of the data,in particular:

to whom they are to be given;to whom they are likely to be shown;for what purposes they are likely to be used.

4. In the same way that employees are given the opportunity to with-draw at the recruitment stage or at the start of a group or depthinterview if it is going to be recorded, they should similarly be giventhe opportunity to withdraw should other people from the company(eg senior managers, HR personnel) who are not selected respondentsintend to be present.

5. Given the sensitivities of conducting research amongst employees,only in exceptional circumstances should groups or depth interviewsbe observed or video recorded.

B: Online (E-mail and Web-based) ResearchThe Rules


Guidance

1. When research documentation is distributed electronically and em-ployees are required to complete it onscreen, researchers should takeinto account any limits on the employee’s privacy when answering,and how this might impact on the validity of the research results.

2. Research documentation sent out as attachments should be piloted onthe employer’s network. This will ensure that they can get throughsecurity barriers or firewall and identify any problems with either thelayout or appearance of the documentation by virtue of the equipment(eg PC) and software available to the employee.

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3. If some form of tracking is used (to ensure that employees do notsubmit more than one response) it should be undertaken by theresearcher and not the employer.

4. Researchers should take the following issues into account whendeciding on whether an online approach is the best methodology touse. These include:

access: How many people use e-mail/the intranet/internet? Howmany have individual access? Do they have internet access?user confidence: How new is e-mail/the intranet/internet? Are theyused daily? Are all employees equally confident using these chan-nels?confidentiality: How much concern is there? How much reassuranceis needed? Would a password ease (or exacerbate) these concerns?

5. Although online research affords the possibility of requiring respon-dents to answer a question before moving on, this capability shouldnot be deployed in areas such as profiling or demographic questionswhich could raise concerns about the identification of individuals.

3: Reporting the ResultsThe Rules


B42 Members must ensure that any material handed to Clients orincluded in reports, without consent from Respondents, isanonymised eg transcripts containing verbatim comments andprojective material.Comment: Special care must be taken when the universe is small, as in thecase of some business to business research studies.

Guidance

1. The employer should be made aware before a project has startedwhat employee information can be detailed in the report. Only in in-stances where an employee has given permission can their name berevealed.

2. In accordance with rule B8, care must be taken when the range of em-ployees to be interviewed is limited by job title such that by identifyingthe department or the local region, the identity of the employee is

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disclosed or potentially disclosed. Wherever there is a conflict ofinterest between a researcher’s duty and obligation to employeesand/or to employers, the duty and obligation to employees isparamount.

3. It is recommended that reports should only examine the results ofsub-groups where 10 or more have responded to the research.

4. Due to the nature of employee research there is a higher possibilitythat employees will be contacted on a regular basis. Therefore,research documentation should be clear, relevant and logical to avoidemployee fatigue. (See the MRS Questionnaire Design Guidelines forguidance in this area.)

5. Researchers should agree in advance with the client as to how em-ployee complaints about internal company matters are to be handled.As a general rule, researchers should only pass back complaints at avery general level of detail, given that the complaints will have beenmade anonymously. Anonymous allegations made in the course of aresearch project should not be the sole grounds for disciplinary actionagainst a named employee. Rather, they should be a starting point foran investigation by the employer, if it is warranted.

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Index

ABN AMRO 77absenteeism 12, 26

see also sickness and absenceabuse 27–28

see also harassmentaction plans 8, 68, 99–100, 112, 127,

130, 135advertising 17, 57, 67, 69, 77–78, 133analysis 7, 11, 12, 22, 38, 46, 56, 106,

111, 125, 144–46, 148–53annual report and accounts 45, 78–79anonymity 11, 49, 72, 86, 107, 114,

116, 124–25see also confidentiality

appraisals 21, 35, 67, 143Argyris, C 28, 143Asda 77Ashurst Morris Crisp 10attitudes 1–3, 6, 9, 11, 18, 25, 33,

36–37, 44–45, 98, 108, 119–20,130–31, 135, 141, 145–46, 149–50

attitude surveys 5, 6, 9, 12, 15, 18, 27see also opinion surveys

attribution theory 30

Baker and Tilly 47balanced business scorecard (BBS) 6,

15, 20–21, 100, 146Barrow, S 144Beatty, S 39behaviours

of customers 25, 36, 42

of employees 12, 15, 25–26, 28, 30,34, 46, 80, 94, 130,149

organizational citizenship 34,42–43

benchmarking 9, 13–14, 60, 87Bitner, M 27, 30Blasi, J 52Bloch, B 16blogging 71bmi 32Bond, A 140Bono, J 28bonus schemes 15Booms, B 27, 30Brace, I 88, 109brand(s) 25, 34, 39, 89, 100, 144–45

identity 10loyalty 145names 58see also employer brand

Briggs, T 15bullying 12, 15Burke, W 22Burmah Castrol 18–19business process re-engineering 8business strategy 8, 15, 20, 22, 32, 34,

37, 51, 56, 61, 143, 164

Cadbury Schweppes 92, 130call centres 31–2, 41, 77Canadian Imperial Bank of Commerce

37–38

0-7494-4540-8_INDEX_205

census 14, 85, 95, 120see also sampling

change management 6, 8, 23Chartered Institute of Personnel and

Development (CIPD) 59, 147chat rooms 76, 136Cisco 69cluster analysis 150commitment

by employees 1, 7, 8, 18–19, 33–34,37–39, 60, 97, 134, 143

by employers 17, 49, 56, 59, 66,82–83, 86–87, 96, 99, 112

communication 7, 11, 17, 123, 136,144, 148, 151

about research surveys 82–84, 92,96–97, 99–100, 107, 112

channels and media 1, 3, 17, 63–64,70, 72, 74–77, 96, 100, 133

development 23, 80, 101, 134external 17–18, 45, 51, 77–79,

132–33internal 1, 3, 6, 9, 11, 15–18, 20–21,

34, 37, 44, 47, 49–50, 54, 62,63–80, 82–84, 94, 100, 102–03,128, 131, 133–35, 139, 147–48,155–56, 160

programme 52, 63, 112two-way 72, 83, 101

community 1, 43Compass 54confidentiality 82, 86, 97, 99, 107, 111,

113, 116, 124–25, 152, 167see also anonymity

conversion model 33Conway, N 143cooperatives 47–49coordinators 82, 85, 97, 100corporate social responsibility (CSR)

43, 55–56Cranfield School of Management 32, 61culture

change 10mapping 10of organizations 8, 10–11, 19, 22,

51–52, 65, 84, 101, 129–30, 135,143

customers 1, 3, 7, 17–23, 25–46, 49, 51,55, 57–58, 62, 71, 77–78, 86, 96,98–99, 101, 119, 125, 131–33, 140,142, 144–46, 148, 151–53

loyalty 23, 37–39satisfaction 3, 12, 18, 21–22, 25,

32–33, 35, 37–38, 42, 44,145–46, 148

Czepiel, J 39

data fusion 146, 152data protection legislation 84, 116–17,

135, 146, 152Deming, W 39Department of Trade and Industry

(DTI) 50, 165depth interviews 121, 134development plans 35, 61Dilbert cartoons 79Direct Line 77discrimination

between people 27, 113in analysis 89

discussion guide 121diversity 11, 56–57, 147, 161Dow Chemicals 38, 57downsizing 8, 29Drucker, P 1, 123

e-mail 16, 71–72, 74, 95–96, 103–07,113, 115–17

employee satisfaction 3, 6, 14–15, 25,32, 38, 42, 61, 101, 145

employer brand 144–45engagement 8, 12, 34–36, 44, 56, 72,

84, 92, 100, 112, 117, 121–22, 124,126, 151, 155

Enron 47ESOMAR 20, 104, 140European Foundation for Quality

Management (EFQM) 20expectations

of customers 42–44, 141of employees 11, 28, 30, 51, 130,

143, 145, 151, 153

factor analysis 150Farner, S 41focus groups 16, 36, 120, 125

see also group discussionsFoss, B 140Fujitsu 32

Gattorna, J 40Gittell, J 46Global Home Loans 134

Index

206

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Greenway, G 29grievance procedures 74, 165group discussions 93, 120–27, 129,

131–34, 136see also focus groups

Guest, D 143

Halifax 77–78harassment 11, 35Harrington, H 25, 31, 46Hayday, S 34Hay Group 26–27Health and Safety Executive 11–12Heskett, J 40, 46Hill, N 37Hofmeyr, J 33human capital 3, 46, 59–60, 142Human Resource Information Systems

(HRIS) 12, 147human resources (HR) 6, 18, 22, 33,

54, 61–62, 79, 98, 134–35, 139,141– 45, 147

IBM 31, 38Information and Consultation Regula-

tions 4, 50, 64, 155–68insight 3, 18, 132, 139–41, 144–48internet 69–70, 95, 103–07, 113,

115–17, 136interviewers 13, 88–89, 93–94, 113,

125, 129intranets 17, 21, 51, 54, 69–72, 76, 96,

103–06, 135Investors in People (IiP) 19–20involvement (organizationally) 2, 6,

8–9, 19, 34–35, 37, 43, 49, 51,54–56, 72, 82, 99, 112, 127, 167

Jamieson, D 33job satisfaction 6, 19, 28, 31–32, 143,

148John Lewis Partnership 48–49Johnson, J 65Judge, T 28

Kaplan, R 21key driver analysis 7, 148Kim, C 18Kirn, S 36knowledge management 57, 59, 74Koys, D 42Kruse, D 52

Lavis, C 28leadership 1, 6, 20, 22–23, 47, 61–62,

101, 151Le Pree, J 32Levering, R 46Likert, R 89line management 12, 145

see also managementLitwin, G 22Locke, E 28London Underground 7loyalty

of customers 23, 37–39, 58, 151of employees 29, 33, 46, 142, 145

Luthans, F 41

McClymont, L 15McNeil, R 20Madigan, C 57magazines and newsletters 17, 49, 54,

72, 96management

information 92of change see change managementof organizations 1, 3, 6–7, 9–10, 12,

15–16, 27, 42–43, 49–50, 61–62,64–65, 72, 74, 82–83, 91, 96–97,99, 102, 137, 139, 163, 166

styles and structures 8, 16, 65summary 98systems and models 2, 6, 19–23team 1, 16, 44, 49, 51, 64, 66, 76, 93,

166see also line management and perfor-

mance managementManpower 99–100margin of error 14Marketing Research Association 104Market Research Society 2, 103, 121,

135Conference 7, 15, 17, 29, 33, 140,

144Mauborgne, R 18Mayo, A 60meetings

briefing 65–66, 96conferences 68–69town-hall 37, 68

mentors 21mergers and acquisitions 6, 8, 99, 164Microsoft 71

Index

207

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moderators 120, 122–26, 128–29, 136,150

Mohr, L 27, 30Mondragon 48morale 6, 26, 29, 61, 78, 90Morrison, D 38Morrisons 27motivation 1, 3, 7, 18, 20, 23, 44, 52,

61, 90, 97, 100, 120, 127, 129, 131mystery shopping 12, 40

National Health Service 35National Whistleblower Center 125Nationwide Building Society 38NatWest 96Naval Air Depot 32Neely, A 61Nokia 62, 72Norton, D 21notice boards 73

online research 3, 86, 108–14, 118,135

Opinion Research Corporation 17opinion surveys 5, 34, 61, 88, 101, 150

see also attitude surveysorder effect 14, 109Organ, D 42organizational citizenship 34, 42–43Orwell, G 75

participation 3, 19, 35–36, 48, 52, 62,64, 84, 95, 165

in research 97, 104–05, 114, 126–27Paton, S 27Patterson, M 38Pensions Regulator 134–35performance management 15, 142,

147Perryman, S 34Petrash, G 57pilot study 87, 92–93, 97, 111, 114,

130PricewaterhouseCoopers (PWC) 57pride 6, 38, 78

see also moraleproductivity 16, 23, 47–48, 53profit chain 36, 40, 45, 68psychological contract 28–29, 142–44

quality systems 19see also total quality management

questionnaire 10, 13, 39, 85–100, 102,104–17, 120–21, 126, 128–29,135– 36, 150

design and layout 88–89, 91–93,102, 106–10

self-completion 89, 93–95, 129, 135Quinn, R 36

random sampling 96rating scales 88–89recognition 6, 21, 38, 62, 144, 148recruitment 18, 23, 57, 60, 65, 142–43,

145, 164–66for research 135–36

Reichheld, F 45, 58reminders 97, 110–11remuneration 7, 43, 61reporting results 9, 85–86, 98–99, 103,

110–12, 124, 127–28response rates 82–83, 91, 95, 97–98,

107, 110–11retention 18, 23, 26–27, 42, 52–53, 56,

61reward 6, 11, 15, 29, 31, 42, 49, 51, 62,

73, 143, 146–47Reynolds, K 30Richards, T 33Right Management Consultants 12,

99–100Robinson, D 34Robinson, S 29Rogelberg, S 97Rucci, A 36Ryan, A 33

Safeway 27Sainsbury’s 15, 78sampling 14, 22, 95–96, 101, 134, 148,

152saturation 1, 20see also census and random

Sasser, W 40, 46satisfaction

see customer, employee and jobSchlackman, W 140Schlesinger L 40, 46Sears 36, 68segmentation 134, 146, 148–51shareholders 1, 36, 45–48, 54, 79

employees as 47, 51–52Sheldon, R 7

Index

208

0-7494-4540-8_INDEX_208

sickness and absence 12–13, 61, 147see also absenteeism

SIMALTO 30Sinclair, R 28Sommer, S 41Southgate, P 29Southwest Airlines 46stakeholders 1, 3, 11, 17, 19, 23, 25, 33,

44, 54–56employees as 6

Standard Oil 17stated preference technique 7Stern, S 10Stewart, T 74Stone, M 140stress 11–13, 130succession planning 33suggestion schemes 16, 21, 37, 73–74,

129, 132supply chain 8, 40Sveiby, K 58–59, 61

talent 18, 23, 142target setting 15, 31, 130Teer, F 140telephone research 76, 93, 96Tesco 56, 151Thornley, R 140Thought Police 75–76Total 8–9total quality management 20–21, 41

see also quality systemsTowers Perrin 35trade unions 64, 126, 141, 155, 157,

162training 21, 23, 60–61, 70, 75, 88, 90,

112

and development 2, 6, 19, 147–48,164

in research skills 2, 85Trustee Savings Bank 29Tuckman, B 122turnover 11, 18, 23, 26, 32, 58, 61, 145,

164see also recruitmentsee also retention

Unilever 20

values 1–2, 9–10, 23, 35, 39, 59–60,143

verbatim comments 112video 17, 66, 68–69, 96, 125

links 68, 136Vulliamy, J 140

Wainwright, M 32Wallman, S 57Walmart 77Watson Wyatt 2, 46Welch, J 32West Bromwich Building Society

56–57White, M 29Williams, P 140Willis, K 134–35Wills, S 140Worcester, R 17, 140work/life balance 6, 11, 29, 151works councils 50–51, 157, 159, 162workshops 71, 121, 131WorkUSA 2

Yes, Minister 14

Index

209

0-7494-4540-8_INDEX_209

0-7494-4540-8_INDEX_210


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Transcript of Employee Research